Isn't Microsoft Supposed to Be Good at This?

Tomorrow, software giant Microsoft (NASDAQ: MSFT  ) launches Windows 8, the single biggest product launch in years, which is tasked with reinvigorating sluggish PC sales and growth for all the companies that rely on the PC market. On top of that, it will mark one of the biggest moves that Microsoft has made over the past 40 years into consumer hardware, with the launch of its Surface RT tablet.

Microsoft doesn't have a solid track record when it comes to first-party hardware, primarily selling keyboards and mice. The Zune and Kin were both poster children of Microsoft's hardware ineptitude. The Kin got axed a mere two months after launch. Even the Xbox, which is currently the top-selling game console in the U.S., could be considered a financial failure when you consider how many billions of dollars the entertainment and devices division has cumulatively lost over the years.

The Surface is boldly standing up to Apple's (NASDAQ: AAPL  ) iPad, directly challenging it in pricing. Microsoft has a lot riding on its new tablet. Will Surface succeed?

Survey says
Ahead of the launch, various members of the tech media have received units and reviews have begun to show up, giving consumers an educated opinion of whether or not the device is worth their hard-earned dollars. Remember, this is the Surface RT version that runs on an NVIDIA (NASDAQ: NVDA  ) Tegra 3 -- the ones running Intel (NASDAQ: INTC  ) chips will follow later.  Fellow Fool Eric Bleeker even thinks NVIDIA might be one of Surface's biggest losers, since the tablet's high price may not translate into meaningful unit sales that would have otherwise benefited the graphics specialist.

Let's see what the professional geeks think:

  • The Verge: " The whole thing is honestly perplexing. If this device is not as good as (or better than) the best tablet, and not a complete alternative to a laptop -- who is this for? What is it supposed to be?"
  • Engadget: "... of the content consumption and entertainment, where the Surface is currently lacking. It needs a bigger pile of apps and games to make up for that and, while we're sure they're coming, we don't know when."
  • ABC News: "The Surface is full of potential, but until its software performance and apps are as strong as its hardware, I, unfortunately, will still drag both a laptop and an iPad through [TSA] security."
  • The New York Times: "So that's the amazing, amazing hardware. Now the heartbreak: software."

It would seem that the consensus is that Microsoft absolutely nailed it on the hardware side of the equation of building an integrated device. Earlier this year, The New York Times told the story of how Microsoft execs were flabbergasted at the lengths that Apple went to in order to set its hardware apart from the competition. The iPad is built using high-grade aluminum from Australia, with Apple naturally locking down copious quantities of the material.

That spurred the software company to begin searching for its own unique materials to build the Surface tablet, and they landed on magnesium. Microsoft is calling it VaporMg, which gives the Surface a unique look and feel. This is high-quality stuff, and a testament to how serious Microsoft is taking the hardware.

A soft Surface
Unfortunately, the software side of Surface seems to be the device's weakest link. The Verge noted, "Nearly every app I tried crashed completely at least once while I was testing the tablet, third and first-party." The New York Times' widely followed David Pogue even titled his review, "Sleek Tablet, but Clumsy Software."

It seems that the true irony that Surface embodies is that a software giant just made a device with integrated hardware and software, but the software is far worse than the hardware. Maybe these are the bugs that Intel CEO Paul Otellini was reportedly referring to.

Doing the job halfway simply won't be enough, especially when Surface RT is tasked with directly challenging the iPad, which has solid hardware and software. Shouldn't Microsoft be good at software by now?

It's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In this brand-new premium report on Microsoft, our analyst explains that while the opportunity is huge, the challenges are many. He's also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.


Read/Post Comments (4) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 25, 2012, at 6:27 PM, WindsorSmith wrote:

    "At Microsoft, quality is job 1.1"

  • Report this Comment On October 26, 2012, at 7:18 AM, toph36 wrote:

    Did you see the Surface launch yesterday?  The presentation was excellent.  The only thing that the iPad has on the Surface are the breadth of 3rd party apps.  But those will come.  The device is amazing.  I have an iPhone and I often have all my apps crash at once, so you can't tell me that iOS doesn't have its own challenges.  Microsoft really nailed it with Surface.  If you have reservations about Windows RT, then go with the Pro, you won't be disappointed.  

  • Report this Comment On October 26, 2012, at 9:12 AM, lucasmonger wrote:

    Prior to Apple's iPad mini announcement, the Surface looks like a somewhat decent laplet (or should it be a tabtop?). But now that you can get an iPad for $329, the $499 price on the Surface just doesn't seem as appealing.

    Although the Surface Pro prices haven't been announced yet, if they follow suit and match the $999 of the MacBook Air 11", I don't think many people will be buying it.... at $799 or $699 maybe.

    We'll have to see if the Microsoft bean counters have their say and they go for profit or broad market adoption.

  • Report this Comment On October 27, 2012, at 11:44 AM, ptoinson wrote:

    The windows 8 platform is a bit like trying to use a hammer as a screwdriver. When used on a tablet, you get some pretty cool and innovative tablet like interaction. But, you also get forced into non-tablet scenarios that beg your impulses to pull out the keyboard and mouse. In that respect, Microsoft is not committing to the pure touch tablet approach of Apple, Google, Amazon and others, but rather is simply dabling in that approach while keeping their feet grounded in the traditional laptop. On the other hand, the touch approach Microsoft has chosen for the desktop is burdensome. I don't touch my desktop screen. In fact, most folks don't. But, for most tasks on windows 8 either the program, setting, or feature has moved to a user experience paradigm developed for smaller touch devices. In many cases I find my 27 inch display filled with a single, king kong sized app. It seems MS would like the desktop and touch device to follow the same principles and I'm afraid what they have ended up with is a compromise of both. The frustrating part in this is that windows on the desktop was not previously a compromise. It sure feels like it now.

    Personally, I've not played with windows 8 on a small lap pad with a keyboard and mouse. I've used it extensively to develop software on a touch only device as well as a desktop and a laptop. On both the desktop and laptop I will probably stick with windows 7. If I'm forced to spend more time on windows 8, I will likely hack in a start menu and ignore the full screen apps. My dev machine for windows 8 already has a couple of custom taskbar tools so i have easier access to the features now hidden away.

    As far as purchasing a windows 8 touch device. I would not purchase a touch only device. With both the iPad and nexus 7, I purchased both prior to touching either one. I'm much more skeptical about the Surface. My experience thus far indicates I would likely require a keyboard and mouse and then i'd want to use it prior to purchasing and see if it's really a tablet of just a more compact laptop.

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