Microsoft's First Move Down Flops

The Acer Iconia W3 isn't long for this world. The device is the first eight-inch tablet running Microsoft (NASDAQ: MSFT  ) Windows 8, an important strategic move for the software giant as it looks to enter the small-sized tablet segment. Microsoft has been making aggressive concessions with OEMs to encourage them to target smaller form factors, including discounting Windows license fees and bundling in Office for smaller devices.

Sadly, the Iconia W3 looks like a flop. The tablet is heavy, bulky, and has a low-quality display that The Verge simply calls "disgusting." It's significantly heavier than the top competing devices. CNET concludes that "a handful of flaws drag down what would otherwise be a great budget pick." Gizmodo doesn't think it can measure up, either.

The good news for Microsoft is that Acer has taken these criticisms to heart, and is hard at work on an upgraded version. Once existing stock at retailers is cleared out, Acer won't be refilling those shelves with the current model. Instead, the OEM is working to release a successor that's thinner and lighter. The company may upgrade from the current low-quality TN panel to a high-end IPS panel, which is what most rivals, like Google's Nexus 7 and Apple's iPad Mini, sport.

Tablets like the Iconia W3 are exactly why Microsoft decided to get in the tablet game in the first place with Surface. The company was being held back by third-party OEMs that cut costs because of slim margins. Integrating hardware is a better way to deliver a consistent experience. While Surface hasn't exactly made a huge dent in the market place, the competitive threat directly from Microsoft should catalyze a shift toward higher quality.

If the Acers of the world don't launch a compelling tablet to target the seven-inch to eight-inch market, Microsoft will just have to take matters into its own hands.

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