Microsoft is its 'own worst enemy' in bold tablet move, says analyst

Forrester analyst worries that the dual-OS strategy will confuse buyers

Microsoft's venture into selling company-designed tablets is fraught with risk, but tops on one analyst's list is the way the company is setting itself up as its own rival.

"Microsoft will be its own worst enemy in this market," said Sarah Rotman Epps, an analyst at Forrester Research, in a Monday blog post written after the software vendor unveiled its new Surface 10.6-in. tablets.

"The worst thing that could happen to Microsoft's Windows RT tablets is Windows 8 on x86," argued Epps, referring to the two distinct models in the Surface lineup.

On Monday afternoon, Microsoft executives, including CEO Steve Ballmer and Steven Sinofsky, chief of the Windows division, introduced the not-yet-available Surface tablet, which will be sold in two flavors.

One runs Windows RT, the version of Windows 8 that works only on devices powered by ARM-licensed processors. ARM CPUs drive virtually every mobile device, from smartphones to tablets, including Apple's iconic iPad.

Windows RT, a major departure for Microsoft in more ways than one, is the company's attempt to break into the lucrative consumer-oriented media tablet market.

But Microsoft will also sell a version of its new tablet that runs Windows 8 Pro. While identical at first glance to its Windows RT sibling, the Pro model runs the more traditional Windows 8 on hardware powered by Intel processors.

Because the Windows 8 Pro Surface is built with an Intel chip -- a quad-core i5 based on the just-released "Ivy Bridge" architecture, which is the same processor used in Windows laptops and, as of last week, the one packed into Apple's MacBook Air and the least-expensive MacBook Pro -- it will run all legacy Windows applications as well as the newer Metro apps that Microsoft and others are developing. It will also be heavier -- by half a pound -- and slightly thicker than the Windows RT Surface, although by other external appearances it will be identical.

And that's the problem, according to Rotman Epps.

"Microsoft and its partners need to articulate a compelling strategy for how they will manage consumer expectations," she wrote. "Consumers aren't used to thinking about chipsets."

Confusion could dampen sales, or worse. "Selling x86-based tablets in the same retail channels as Windows RT tablets will confuse consumers and sow discontent if consumers buy [the Windows 8 Pro Surface] and think they're getting something like the iPad," said Epps.

As Rotman Epps noted, Microsoft will use the same outlets, at least initially, to sell both Surface tablets: Its small chain of U.S. retail stores and its online store in a limited number of countries.

Similar confusion has dogged Microsoft in the past -- when it used a bare-bones version of Windows, called "Starter," to equip netbooks, for example, and when it shipped six different versions of both Vista and Windows 7.

When Microsoft launched Windows 7 Starter in late 2009, a survey showed that nearly two-thirds of those polled did not know that Starter -- which was licensed only to makers of small, inexpensive laptops known as "netbooks" -- lacked some features that were standard in the older Windows XP.

Those users were likely to get hot under the collar when they discovered the missing features, said bloggers and analysts.

Rotman Epps worries that Microsoft will encounter the opposite problem with its two models of Surface tablets: that people will mix up the two devices, pick the more expensive Windows 8 Pro model and be unhappy when they realize they paid more for features that they didn't want or don't need on a tablet -- such as the ability to run older Windows software.

Other analysts also pointed out problems with Windows 8 tablets, although they didn't voice Rotman Epps' concern about confusion.

Microsoft on Monday unveiled a product aimed directly at Apple's iPad, releasing a tablet called Surface. The new tablet will be available in two versions: One with the Windows 8 Pro operating system and one based on Windows RT.

"The [Windows 8 Pro] Surface is still a PC, which means it has all the good things about that, like the ability to run a wide range of software, but it also has the bad things," said Tom Mainelli, an analyst at IDC. Among the latter: The habit of a Windows machine's performance to degrade over time as users install some programs, uninstall others, and then repeat the cycle.

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