Microsoft unveiled a Windows- powered tablet computer under its own brand, altering its strategy of focusing on software and directing its partners to make the machines in a renewed attempt to take on Apple Inc.'s iPad.
But the company is stepping into the tablet market at a critical time when consumer interest in iPads is soaring and growth in PC sales is slowing. Even some tablets built on Google's rival Android mobile operating system, such as the Amazon Kindle Fire, are selling strongly.
Gartner analyst Michael Gartenberg says that in a market so dominated by the iPad, Microsoft "better tell you not only why (its tablet is) different but why different is better in terms of value and in terms of price."
Even though it will likely never outsell the iPad, the Surface sets a clear standard for HP, Dell, Lenovo, Acer, and Asus. It shows the rest of the industry the correct way to make a Windows 8 tablet.
The Renewed Strategy
Though Microsoft's "open" strategy, which lets consumers buy Windows on a wide range of devices, has been a winning tactic for decades, Apple's "we make the whole widget" plan has been far more successful over the past several years.
But Microsoft is taking a note from Apple, moving becoming a hardware designer itself. The shift to a so-called vertical integration strategy of putting software and hardware under the same roof promises more sales and control.
Apple's sleek iPad, has set the bar for design, screen technology, battery life and instant-on capabilities, often attributed to its one-stop-shop for hardware-software products.
"If you want something done right, sometimes you have to do it yourself," says Forrester analyst Sarah Rotman Epps
And Microsoft's push in this direction might be a catalyst for others to follow suit. Google's acquisition of Motorola Mobility could allow it to design its own hardware around Android-based tablets. Samsung has also said that it would like to design more software and is widely expected to have its own operating system.
What Microsoft lacks in hardware department it makes up for in software assets. The company has garnered praise in early reviews of its Windows 8.
And it already has taken a uniform approach to infusing the look and feel of Windows 8 in its products from Window Phone to Xbox — giving consumers a taste of familiarity across devices they use.
The software giant could incorporate its Skype Internet phone software in a tablet, which could make for a compelling rival to Apple's FaceTime video-calling feature on iPhone and iPad. And integration of Microsoft's popular Kinect camera, used on Xbox, could give a tablet an unusual twist — voice and motion controls.
"They could create some great synergy with Xbox," says Adds IDC analyst Al Hilwa.
Also, Microsoft has invested $605 million investment in Barnes & Noble's Nook e-reader.
Finally, the software maker is notably attempting to replicate some of Apple's retail store feel. The Microsoft stores resemble the minimalist approach favored by Apple Stores and allow people to try out laptops and other electronics.
What's been lacking is the power that draws crowds of consumers to see the products. For Microsoft, Surface could be a start.