Microsoft's Surface tablet no threat to Apple's iPad

Price may be major stumbling block to real competition, but Windows tablet could be enterprise winner, say experts

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If Microsoft meant the iPad as the comparable ARM tablet, the Windows RT Surface might be priced at $599 (for the 32GB version) or $699 (for the 64GB), the prices Apple charges for similarly-configured iPads. Meanwhile, a Windows 8 Pro tablet would cost at least $700 and more likely $800 to $900 or higher, said Gottheil, citing current prices for ultrabooks.

The latter price range strays dangerously close to not only the prices of Windows-based ultrabooks, but also the $999 price of Apple's entry-level MacBook Air, a thin-and-light laptop that, like the Surface, features 64GB of flash-based storage, an Intel Ivy Bridge i5 processor, and a screen close enough in size not to matter (11.6 in. versus the Surface's 10.6-in. display).

And the MacBook Air is just four ounces heavier than the Windows 8 Pro Surface.

Only if Microsoft drew the Windows RT Surface's price from Android tablets would it post a number lower than the iPad. "If they go head to head with Android [tablets], they need to come in at no more than $300," said Gottheil.

Other experts told Computerworld that $400 -- a dollar above what Apple charges for 2011's 16GB iPad 2 -- should be the price of the ARM-powered Surface.

But analysts thought that Microsoft's late-comer status would force it to undercut prices of current players to gain any traction among consumers, though not necessarily among businesses.

"Consumers will require a healthy discount for Surface versus an iPad, something we believe will prove difficult, [since] the new iPad starts at just $499 and the iPad 2 starts at a price of just $399," White said.

A possible complication of Microsoft's calculations would be Apple's introduction of a long-rumored "iPad Mini," a scaled-down iOS tablet featuring a 7-in. display. "[That could be] released this September at a price point of $250 to $300, providing a more cost-competitive product for Apple and opening up a new market segment," added White.

Only in one fashion did Microsoft effectively compete with Apple yesterday: The way it introduced the Surface.

Several people, including some who attended the Los Angeles press conference, pointed out similarities between Microsoft's presentation and Apple's product announcements -- from pacing and the use of video to the participation of multiple executives and even a designer touting various features.

"That was an Apple-type presentation," said Gartner analyst Michael Gartenberg in an interview Monday. "It was weird. It was like Ballmer was channeling Steve Jobs."

Microsoft CEO Steve Ballmer kicked off the press conference, a traditional Jobs chore -- and one Apple's current CEO, Tim Cook, replicated at this month's Worldwide Developers Conference -- then handed the bulk of the event over to a succession of executives before wrapping it up.

"There's not anything wrong in learning from successful competitors," said Gottheil. "Even companies far outside the tech world have learned from Apple. You tell a story, show some passion and pay attention to the details of how you tell the story. [Apple's] formula is so good that even the charismatic-inhibited, like [Tim] Cook, can do it."

And apparently so can the usually emotive Ballmer, who was uncharacteristically low-key -- another trait of Apple's product announcements.

But Gottheil rejected the idea put forth by others that the Surface unveiling was a forerunner of a totally revamped Microsoft, one which would duplicate every aspect of Apple, not just its launch template. Pundits who expect to see Microsoft change its ways have speculated that the company will mimic Apple's obsessiveness about control, and will want to rule all parts of its ecosystem, from the hardware to the software to content to the cloud.

"I see [the Surface] as priming the pump," said Gottheil. "Microsoft wants to establish the viability of the Windows tablet and get a foothold. But it doesn't want to be in an Apple situation where it does everything. It likes the OEM model, and it doesn't want to kill off the very important licensing business."

Microsoft has not committed to a ship date for either the Windows RT or Windows 8 Pro Surface tablets, but it has promised that the former would debut around the same time as the next Windows' release -- most expect that in September or October -- and it said the latter would follow 90 days later.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer or on Google+, or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Copyright © 2012 IDG Communications, Inc.

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