MANILA, Philippines — Software giant Microsoft confirmed that it will be shipping the new Surface tablet along with its new operating system on October 26, at the same time admitting that its venture into the tablet space may hurt its relationship with its ecosystem partners.
In an annual report filed by the Redmond-based technology firm on Friday before the US Securities and Exchange Commission (SEC), Microsoft said it will be launching the newly overhauled Windows 8 by late October. “At that time, we will begin selling the Surface, a series of Microsoft-designed and manufactured hardware devices,” it revealed.
Intended to compete with tablet juggernauts today, the Surface will feature a 10-inch screen and a separate keyboard that can be paired with the device. It will ship with the new Windows 8 pre-installed.
Announced in mid-June, Microsoft’s move into the tablet market generally blind-sided many industry pundits and even its hardware partners that rely on the company’s software to run their notebook and tablet devices.
With the software giant encroaching on what has exclusively been territory of device manufacturers, Microsoft admitted in the SEC filing that its Surface bid “will compete with products made by our OEM partners, which may affect their commitment to our platform.”
It will be remembered that Acer, a Taiwan-based PC manufacturer, reactive negatively to Microsoft’s Surface news in June, saying its new eye on hardware devices may shift its focus away from making great operating systems for PC vendors.
Microsoft’s relationship with PC manufacturers, however, is virtually the least of its problems with the Surface. According to the same filing, its tablet faces an uphill battle against competing devices, which already had a headstart in the market, as well as the integrated software and hardware approach of some companies with their tablet offerings.
“We also offer vertically-integrated hardware and software products and services,” Microsoft claimed. “However, our competitors have been in the market longer and in some cases have established significantly large user bases.”
Additionally, the existence of application “stores” such as Apple’s App Store and Google’s Google Play Store poses a gargantuan challenge to Microsoft’s software business, considering it is practically starting from scratch in this aspect for the tablet space while the two technology giants’ app stores already number to hundred thousands.
The key for Microsoft to succeed in this space is to attract application developers to its platform, it related, but quickly relented to the reality that “the prevalence of [smartphones and tablet computers] may make it more difficult to attract applications developers to our platforms.”
The company made a bold move to achieve such a goal in the announcement of its upcoming Windows Phone 8 platform also in June, where it declared that the new version of its mobile operating system will use the same core kernel as its desktop OS, meaning developers can create apps for the desktop and deploy to mobile, and vice-versa.
Microsoft’s recent moves may very well be considered a “perfect storm” for the traditionally software-focused company as it moves into the hardware space, but the company acknowledges that its new ventures still poses a lot of problems due to their “speculative” nature.
“Commercial success depends on many factors, including innovativeness, developer support, and effective distribution and marketing,” Microsoft said.
“If customers do not perceive our latest offerings as providing significant new functionality or other value, they may reduce their purchases of new software products or upgrades, unfavorably affecting revenue. We may not achieve significant revenue from new product and service investments for a number of years, if at all.” it added.
