An interview about Microsoft's Surface

This interview was conducted with Bruno Ferrari Editor of Exame magazine in Brazil.

First, do you have forecasts for tablet market share including Microsoft for next years? (Apple, Android, Amazon etc)?

I have some guesses but I don’t think it’s something that is defensible. Too many things can change. Fundamentally I believe Microsoft sees the tablet as a PC and intends to migrate a substantial portion of would-be PC customers to tablet forms. If they are successful then they preserve the existing PC user base and allow it to grow a bit.

In contrast Apple sees the iPad as a new type of device that is used for things not directly related to PC style computing. In that sense the iPad competes with PC non-consumption. It means people may own both a PC and an iPad and some will own only an iPad. The iPad will expand the market while taking share from the PC. Windows tablets will try to hold the Windows share steady.

 How do you analyze Microsoft’s strategy with Microsoft Surface? Don’t you think they’re admitting themselves that Apple was right since the beginning?

We don’t know the strategy yet. Without pricing and an idea of how the other OEMs will respond, I have more questions than answers. The fact that they are doing their own PC hardware does indicate that they see the industry architecture changing and that a large number of vendors offering hardware “choice” is not really the basis of competition in PCs. In other words, buyers are not willing to pay a premium for Windows because the hardware it’s available on is offered in a wide range of options.

Do you think MS growth at tablet market will surpass the lost at PC (desktop and notebook) market in the next years?

This is a crucial question. It’s possible that Windows 8 on tablets will create new markets, like the iPad has done and it could take the leading role in expanding computing in a post-PC era. However, to do this, Windows 8 and its successors need to be optimized to solve the new jobs people may have for mobile devices. They have to do this even though they need to sustain the old use cases and business models. To succeed Microsoft needs to “fork” the business model and create new ways of profiting from hardware and software. The rumors that Windows 8 RT devices will be sold at a loss is perhaps a hint that this is the plan.

Did you see the rumor of a 199 dollars Surface? If it’s true, do you think is a good strategy?

It all depends on what will be the alternate source of revenue. I assume there will be some sort of subscription service, taking a page from the telecom industry. Perhaps a mixture of Windows Live services (media, documents in the cloud and software updates). We have to see whether subscription computing makes sense for consumers.

How do you see the problem that MS is creating with its OEM by turning itself on a tablet maker?

There is a problem, of course. However here again the question is whether they are moving to an “ecosystem subscription” model and whether they want to offer revenue share to OEMs. If they offer something then Microsoft plays the role of the operator and device makers are paid some up-front subsidy in exchange for keeping their systems locked into the network.

 One more questions: did you already estimate the shipments of Samsung Galaxy Tab since its launch?

Sorry, I don’t have the Galaxy Tab estimate. However, here is what I found:

A week after its release, Samsung announced that they had sold 600,000 units. On the 4 December, it was reported that the 1 million mark was reached, two months after launch. However, an executive at Lenovo claimed that Samsung had only sold 20,000 out of the 1 million Galaxy Tabs that were shipped. In January 2011 Samsung announced they had shipped 2 million units to stores. In August 2012, actual sales figures were released in the patent infringement court case against Apple showing that a total of 725,000 Galaxy Tabs were sold through Q2 of 2012.

Source: Wikipedia.

Note that the figure of 725k is US only.

  • Sacto_Joe

    To their credit, Microsoft is building their own mobile operating system. But to do so, they have started very late in the game. However, to the degree that the earlier success of Android is going to be affected negatively by the slowly grinding wheel of justice, there may well be an opening for Microsoft. Many Android users won’t be happy to either be forced to pay, in effect, licensing fees to Apple or use substandard devices that have been dumbed down so they don’t infringe, and may “take it out” on Apple by jumping over to Windows. The real question is going to be less about how much or little Microsoft charges for the devices and more about how well they compete with features and apps against Apple’s iOS. If Microsoft devices are decently competitive, then this smackdown of Android by Apple, if successful, will likely give them an opportunity to grow decent market share. That in turn could allow them to leverage their huge installed PC base.

    Regarding the issue of competing against iOS, I don’t have a good feeling about Microsoft’s developing multiple tablets. I know why they’re doing it, but I think it’s a mistake. It’s going to create a circumstance where some people will buy tablets that are really bad PC’s and only so-so tablets, and others will buy potentially good tablets that don’t have “hooks” to PC’s. Assuming Metro eventually gets apps that make it worthwhile, those who invested in so-so tablets are going to be forced to invest again in good tablets. It either won’t happen or will leave a bad taste in people’s mouths.

    But we’ll see. Maybe Microsoft will have a real “hit” on their hands. We’ll know soon enough.

    • Kizedek

      But this is the question isn’t it? Is MS really *building* their own “mobile operating system”?

      One can only wonder what they are thinking or doing.

      By all accounts, they really are building *something* for mobile. There is no more Windows CE, and something is due to follow Windows Phone 7. So, I guess recognizing that it is finally time to go back to the drawing board is “to their credit”. But how is “Metro” really any different from their earlier efforts?

      Unlike Apple, they don’t seem to think Touch merits its own unique approach. So, what MS have done to compete in mobile as they go kicking and screaming into the PostPC Era is to create a detachable UI layer for Windows 8 that makes them look innovative. They also believe in “Windows everywhere”. But, deceptively, you get ONLY the UI layer part of Windows 8 as “Windows 8 RT” on ARM tablets. Do they really deserve any credit for this compromised approach that they are desperate to present as a non-compromised feature of the trusted Windows experience?

      Interestingly, iOS code apparently bears more in common with OS X than does Windows 8 RT with Windows 8, one being their desktop OS successor to Windows 7 and one coming from the Zune or somewhere. And yet iOS has tons of APIs that are uniquely created for or tuned to the Touch experience to deliver as much sophistication to that paradigm as you would expect of Apple’s mature, desktop class OS. Therefore, both the provenance and the maturity of iOS is far and away beyond anything that could be said of MS’ “mobile operating system”.

      So, what does Windows 8 RT / Windows 8 Style UI really offer as an “operating system”? Cool animated transitions for navigation? Web apps or .Net apps? What are the “native” apps like? Are they as sophisticated as native iOS apps? What is this Style UI exactly — did they build it on what they got from Danger for the Kin? We don’t really know (and I’d really like to), because no-one seems to have done much development for the new Windows 8 Style UI yet, and MS is obfuscating it as much as possible. There is even doubt as to how MS’ own Office apps will appear or function under Windows RT, if at all. And there has been little hands-on with the Surface so far.

      I guess we won’t know exactly how much credit to give MS for its mobile “operating system” until an ARM tablet running the Windows 8 Style UI actually ships.

      • Davel

        Why do you say windows 8 is split?

        The question is will having a desktop OS make a good mobile experience?

      • Kizedek

        Wait a second, you’re asking me? (or are you replying to Sact_Joe who wants to give them credit for developing a mobile OS?)

        Above you write:
        “Microsoft has a lot of questions to answer, it is not just the hardware differences with rt and the surface pro. It is software too.”

        That sounds pretty split. I was trying to argue MS hasn’t split their OS, or come up with anything that innovative or worthy of credit — they’ve just added a layer that, as Canucker says, glosses over the fact that the desktop and mobile experiences will be very different (and not in a good way), despite all MS tries to do to make them (wrongly) as similar as possible.

        But we definitely agree that MS has a lot of questions to answer! 😉

    • Samsung built a so-so tablet, and the thing that really made it fail was the lack of tablet optimized apps. For those of you who don’t know what this means, it means the tablet apps are basically phone apps blown up to the resolution of a tablet, which make the apps look terrible in terms of both resolution and layout of the apps. Android fragmentation is, perhaps, the biggest problem for the future of android tablets.
      Now, Microsoft is also going to build a so-so tablet most likely, but it won’t have any apps because of lack of developer interest!

  • Canucker

    Isn’t Microsoft hedging/hoping that the differences between Intel and Arm versions of Windows 8 will encourage people to buy both a PC with Windows 8 and a Tablet with Windows 8? The main difference is that Windows 8 is being marketed as a universal OS unlike OS X and iOS. But in reality, Windows 8 is about as bipolarised as X/iOS in terms of optimization for hardware. Microsoft has tried to hide the underpinnings of Windows under the Metro interface but that GUI is superficial on a PC and seems designed to whitewash the notion that PC/Tablet are coherent. Apples notion is that they are designed for largely different purposes with some overlap.

    • Davel

      Microsoft has a lot of questions to answer, it is not just the hardware differences with rt and the surface pro. It is software too. If you buy office will it work on all platforms? Do you need a new license for each device? How do you manage the interface? Will the software be smooth using mouse and then fingers?

      It is already reported that office is not really finger ready. How will the consumer react to an interface that is not as smooth as Apple’s? Will they say having the full Microsoft experience is better than a coherent interface?

      There are many questions that will only be answered on launch.

    • I think Microsoft has found itself in a bad position in developing Windows 8 for tablets, where one of the key features defining the iPad is battery life. Their existing Windows OS and Office code has simply never been optimized for power efficiency (Office on my Macbook, for example, used to cause the fans to start up — I have no idea why). So MS is forced to try to figure out how to make something that’s close enough to the iPad to pull people back into the Windows fold. And that’s going to mean somehow making sure their RT products aren’t power-pigs.

      From what I’ve seen, Apple spends a great deal of time doing system engineering for power consumption on their iPad software. Microsoft has never been structured to do this kind of across-software-and-hardware-layers system optimization, which is going to make it very difficult for them. But I think the bifurcated Windows/Windows RT and Office/Office RT versions may be driven primarily by the power consumption issue.

      I strongly suspect that Windows RT has jettisoned everything they could leave out that might use power unnecessarily. Same with the cut-down version of Office RT. This may even explain why RT isn’t going to work and play well with the MS corporate environment — it may simply be that the MS enterprise network protocols are intrinsically power-inefficient. (But that’s a wild guess.)

      On the other side of the Great Microsoft OS Divide, it looks like the Win8/Intel tablets will simply be a rehash of the old Windows tablets — basically a Wintel laptop with a funny screen packaging and some a smattering of touch features. Even though Intel has improved the performance of their laptop processors, I expect these things will either have short battery life, poor performance (a la netbooks), or huge batteries. It’ll probably be better than the last iteration, since Intel has made some power/performance advances, and I believe that Microsoft actually cut some of the OS inefficiency out in the Vista/Win7 transition.

  • nypourguy

    In the last critical path at about the 30 minute mark Horace foresees laptops going the way of tablets. I take that to mean that you will have a larger OSX tablet and the Air will eventually go away.

    • Kizedek

      Regardless of size, the question is whether the tablet / Touch OS can begin to do more of the so-called “productive” tasks that we still rely on desktops for. Horace says he is not so sure, though both Apple and MS seem to think tablets could “grow up” to do more heavy desktop replacement computing.

      The question is, is it just a matter of “computing power”. Are we just waiting for ARM processors to get more efficient at the same level of power consumption and battery life? Or is there another dimension to this?

      MS seems to think it is just about raw power, because its real emphasis is (and always has been) on the full Windows experience and throwing more and more raw power into a PC to get Windows to run faster.

      Windows RT (Metro only) for ARM tablets and phones is in my opinion kind of a token gesture to put something out in response to the “media tablet” as suddenly made successful by the iPad (and Kindle, etc.). MS still seems to be betting on raw power to do any “serious” computing.

      Apple, on the other hand, seems to be streamlining its OS’s with every iteration. It is making them more and more lean and fit, and processor agnostic. Apple has consistently done more with less power.

      So, Apple is quietly making progress that means it can make smaller and smaller gadgets do more and more. But is that all they are doing? I don’t think so.

      Apple has positioned iOS devices so that they do some traditional tasks well (email and browsing), and they do new tasks extremely well. Things never done on desktops (pilot charts, menus, doctor consultations, teaching, etc.)

      But what would cause them to make a leap from being hired for these things to performing more and more traditional, heavy, desktop computing tasks? Horace speaks of Touch as an input paradigm, with another on the way, Voice. But it is possible that there is a long way to go with Touch…

      What makes Touch devices unequal to many desktop mouse-based tasks right now is accuracy. Your finger on the two-dimensional plane of a screen or track pad is just not as accurate as your mouse. No way around that. But Apple is reported to be working on a couple of things:

      1) “3D” Screens — semi-transparent, layered windows of some kind;
      2) gestures that you can perform in the air to be tracked by the device’s camera.

      Put those together and you suddenly have a ton more accuracy, a la Minority Report.

      If I could create shapes and objects by pulling them out of thin air and manipulate them in my hand, the sky is the limit! I could squeeze various angles, and maybe they could snap to each degree with a degree readout next to them. If the 44pixel finger detection area was suddenly represented by a couple of inches in the air, you could start dealing with single pixels much more easily and accurately.

      I would love to do more production work with Keynote on my iPad, but my biggest reluctance comes from being unable to be as accurate as I would like as I create intricate shapes and text and try to place them around the slide. I also want pixel by pixel positioning as you get with the arrow keys on the desktop keyboard (this could be a simple iOS Keynote software update that could be done in the meantime).

      I think the potential is there to give Touch the accuracy of traditional mouse and keyboard based input.

      • Well said, combining gestures with 3d screen overlay can result in greater accuracy.

        Coming to productive tasks, There is a larger set of population which don’t need/care about highly productive tasks involving mouse (for eg : Photoshop/IDE..). For them computing needs are met by iPad.

      • Productivity has been redefined in the last decade. It no longer means creating documents. It now means being persuasive. Persuasion comes partly from information but also requires sincerity, emotion and presence. An iPad helps the user deliver this much more readily.

      • Kizedek

        I certainly do agree. I do not like the way many define “productivity”, as if it necessarily entails sitting in a cubicle and creating traditional documents in a traditional way — particularly when my 11-yr old can make a much more persuasive document on an iPad. MS Office does not equal “productivity”.

        You can certainly deliver value and persuade with the iPad. That is the new productivity to a large degree. And you can do a certain amount of creation to that end on the iPad already, as I do. Those who think it is for “consumption” only are completely wrong.

        However, I was speaking to what would, for me, mean I could ditch a desktop computer entirely and go iOS all the way, since the question was about doing away with the MacBook Air in favor of a larger iPad.

        I would happily take the larger iPad every time and leave the desktop OS to specialized power users like film producers and scientists who model the universe… IF we could eke a little more accuracy out of Touch.

      • Kizedek

        Now, I don’t mind either way. We likely will always need laptops and desktops to some degree, just as we need trucks.

        I guess the PostPC era may be about having the right tools for the job at hand, literally “at hand”, with a new sense of what “productivity” is all about. The PC era was about general computing in a fixed environment on one general-purpose device, and having the possibility of being able to do anything you could possible ever want to do however little you actually did it.

  • Combining keyboard to tablet is a business strategy. This strategy enables to survive one of there cash cows : Office.

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