James O'Neill's Blog

June 19, 2012

Microsoft’s new surface. All it needs is love.

Filed under: General musings — jamesone111 @ 4:44 pm

People who buy Apple stuff worry me. Their attachment to one brand of equipment is somewhere between addiction and religious fervour. It is Love.

For over 20 years I’ve used Microsoft stuff, because it is simply a better way to get a job done. Some of the people in my office use Macs and can’t do their job without creating a virtual PC running Windows. It doesn’t reduce their love for their Macs. As the saying goes: The opposite of love is not hate, it’s indifference. And its hard to feel anything but indifferent to the products of any of the major PC makers. The Dell in front of me it is well made, well specified and does everything I ask and more. But Love it ? Most PC users will tell you loving a computer is crazy (which is why Apple folk are so disturbing). 

I think Microsoft’s new surface tablets are trying to create a Windows machine which people – if they can’t actually Love – feel more than indifferent about.  Surface is two Machines: one uses an ARM processor and runs the new Windows RT, so won’t run all your existing software. The other uses an Intel chip – and is thicker and heavier to give it 1/3 more battery life (roughly 130cc and 225g more to get 40 Watt Hours instead of 30.), but that means it should work with existing software and USB devices. I can plug in a mouse and keyboard, and attach two monitors via display port and have a system just like the one I have today. Unplug it and I can use it iPad style or take the “touch Cover” keyboard * and write documents or use the Pen to annotate documents if that’s what I choose. The ARM version has office built in, but no pen and a different video connector (so probably only 1 screen). Even with its smaller battery it will probably run for longer (though like the shipment date and price, battery life is yet to be confirmed).

Mary-Jo Foley wrote of the launch of Surface “It’s the end of an era. Or maybe the start of a new one.” Indeed. Microsoft began by providing OEMs (including Apple) with BASIC, then with Operating Systems. OEMs where very much the Geese that laid golden eggs for Microsoft – during the 10 years I worked at there (not in the OEM part of the business) there were times when I felt that the company forgot the problem with Geese is they produce a lot of … guano. The OEMs have been poor on design and innovation for a long time: Bloomberg business week no-less talks about how the PC industry should be shamed by Surface, and talks about recent years of PC Development as “the great stagnation”. The Bloomberg piece puts some blame on Microsoft and Intel for taking too much from the OEMs, I doubt that if the chips and OS had cost less the difference would have gone into innovations that add value. That lack of added value means margins on PCs aren’t great and that’s led manufacturers to take money to install all manner of junk on the machines they ship. The whole DoJ saga – which grew out of Microsoft trying to prevent OEMs installing software it didn’t like – left a situation where the company was required to sell Windows to anyone who wanted it and could not do anything to prevent an explosion of crapware. Lots of people are asking WHY has Microsoft chosen to get into making computers? There answer is either (a) It can make much more profit by selling computers and operating systems together. or (b) it has an idea of what a PC should be in the second decade of the 21st century and it doesn’t trust PC makers to deliver that by themselves.

If I were fielding calls from angry OEMs upset Microsoft arriving in their market I’d make the case that no OEM would have made a product like this: their lack of a similar product both lost them right to complain and forced Microsoft to do something: if they do have something , Microsoft is saying they won’t undercut on price, something we won’t know for sure until the units go on sale. Some people wonder if Microsoft will aim to make the same from selling the hardware as anyone else and make the price of Windows on top of that; or if they will think $x of margin per unit sold is the same whether they sell a computer/OS combination or they sell a licence to an OEM. The latter would make it very hard for OEMs to compete; but Microsoft trying to make desirable hardware profitably ? That’s a lot less of a threat to OEMs. Apple doesn’t sell as many units as Samsung, but the profit to Apple per unit is more than the retail price of the Samsung. When the iPhone was launched I questioned whether there was sufficient market for a phone at that price point: it has actually sold more units than Apple envisaged at the start: which proves one thing – people will pay handsomely for something they love. 


image* There are two keyboards. The thin pressure sensitive  “Touch cover” and a thicker moving key “Type cover” You can see the difference in this picture  (click for a bigger version)

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