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back to article Surface slab WILL rub our PC-making pals the wrong way – Microsoft

Microsoft’s tablet-like-laptop Surface will compete with machines from PC partners, thus jeopardising manufacturers’ commitment to Windows 8. That’s the bottom line revealed in Microsoft’s latest SEC filing for Wall St’s moneymen. Under the Risk Factors section in Microsoft’s 10-K, here, the company states: “Our Surface devices …

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Meh

The SEC Filing Game

Just a quick reminder that simply because something is filed in a SEC report, doesn't mean the company really thinks there's any likelihood of it happening.

Here's how The SEC Filing Game works:

1. Take out shares in a major company.

2. Find an event that happened but that wasn't in their SEC filing. Claim that this event negatively affected the share price.

3. Sue.

4. Profit!!!

Hence SEC filings are often pre-emptive measures rather than carefully calibrated risk assessments, and shouldn't necessarily be taken as an indication of a company's real opinion on a given subject.

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Re: The SEC Filing Game

They are conservative 'cover our arses' statements *but* everything in the risk disclosure affects stock value, they don't just throw things in to be safe because that also gets them sued.

If something this damaging is in there they believe it's a real risk. This one is so damaging if anything they'll have understated it as far as they believe possible while avoiding a shareholder lawsuit.

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Linux

Re: The SEC Filing Game

No. The SEC is very serious. You don't lie to the SEC. It's far worse than lying to the FBI.

The FBI only cares about silly things like kidnapping. The SEC safeguards money for the wealthy.

It's more serious than you silly let-the-corporations-have-no-accountability tort reform rhetoric implies.

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Anonymous Coward

Upset the competition?

Only if they sell, which is increasingly unlikely.

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Anonymous Coward

Re: The SEC Filing Game

True, Oracle included a bunch of disclaimers about all of the ways that acquiring Sun could backfire and harm their OEM relationships as well. Standard fare.

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Pint

Love how nobody ever mentions that Newell has an axe to grind

<<Newell, speaking in Seattle, Washington, reportedly called Windows 8 "a catastrophe for everyone in the PC space”.>>

Newell also said Windows 8 will "Kill gaming on the PC" what he meant of course was, it will kill Valve on the PC. Micro$oft is starting its own "instant-WinRT-monopoly" app store, undoubtedly also selling games through it... this will affect Steam negatively... If you ask me, he should sell his company to some Schmuck with deep pockets now, before he goes the way of RIM.

Its a shame Crapple didn't patent their all-locked-down business model. Now they can't sue Micro$huft for trying to do the same.

As for games, Windows 8 introduces a Stereoscopic 3D API, which will help games on the PC greatly. No more Nvidia stranglehold, with purposely crippled 3DS output modes over HDMI and such.

My hope is, that people will be too smart to buy Windows RT devices until Micro$oft is forced to add full Windows compatibility and give up on the single source app store. We don't need another anti-competitive stranglehold that serves nothing besides false security claims and getting Micro$oft 30% of everything sold.

So, its a mixed bag. Like the article said :)

Recommendations to consumers?

- Don't buy machines limited to Windows RT.

- Do buy regular Windows 8 machines and simply read the tutorial on how to get the desktop back, if you hate Metro.

- There's also a way to have both the desktop AND Metro in one, simply by installing Rainmeter with the Omnimo skin, both of which are useful and free.

And for Intel's sake, buy some Ultrabooks, jeez, how hard can it be? Eat Ramen for a month...

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I don't see them costing that much

A Windows RT version has to be at least competitive with Android / iOS so I expect it will be $400-500, the x86 version running actual Windows 8 will probably be $800 or thereabouts.

I doubt either will ship with the keyboard, which will be an accessory commanding a large markup. Given how much a smart cover costs for an iPad you can expect the keyboard cover for the Surface to cost that or more.

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Anonymous Coward

Re: I don't see them costing that much

I expect list will be on the pricy side to avoid complaints from OEMs, but like everyone else its pure a guess and could easily be wrong. A major goal with the RT model seems to be to get ARM devices into the hands of developers and evaluators to get the store moving for next year.

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Re: I don't see them costing that much

> competitive with Android / iOS

Apple has the supply chain in place with large volumes to ensure best possible costs. Because they still have the iPad2 being sold they could drop the selling price of this further to cover any 'cheap' Surface. They could also bring out a 7-8" iPad. It is likely that they will keep the iPad3 at a premium price.

Android tablet cover a wide range of prices from ultra-cheap (usually nasty, but not always) through to premium.

Windows ARM tablets will have some significant disadvantages: MS dictates the components and minimum specs. Suppliers know this and can 'negotiate' lower discounts for those. Volumes will be lower for each individual OEM (whereas Apple buys components for 100% of iPad), this is also a factor that will increase costs. OEMs will have to factor in an additional $80 for the OS.

Given an identical machine with either RT or Android, the RT one needs to have a price at least $80 higher.

Given these it is likely that the only barely profitable option for ARM is to try for the premium market at a price level higher than iPad3. But then this will compete with Surface RT where MS does not need to factor in the OS price.

Result: OEMs would make a loss, so are unlikely to bother.

For x86 Windows 8 the costs will be higher because of the i5 (or similar) CPU, GPU, larger battery, cooling, and the _requirement_ that it have keyboard and mouse/trackpad to be useful (for legacy software). It would also probably need to sell with OEM Office. This is why Windows Slates are so much more expensive than ARM tablets, and x86 W8 will not be much cheaper than those.

HP should bring back WebOS and add an Android sub-system. Dell etc should make the Android/Ubuntu tablets they were working on. Google will take the mass-market end of the tablet market. MS alone will have Windows ARM tablets, there will be a continuing small market for x86 tablets but most users will stick with laptops or get iPads.

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barely profitable option for ARM

"barely profitable option for ARM is to try for the premium market at a price level higher than iPad3"

ALL the iPads and iPhones use an ARM core. ARM win from every Android, iOS and Win8 ARM sale.

I expect the only loser will be Intel. They have an ARM licence and the best Fab, why aren't they making Intel ARM SoC?

I expect the Mac Air to switch from x86 to ARM sometime too.

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Anonymous Coward

Re: barely profitable option for ARM

Because Intel doesn't want to sell ARM chips. They did and sold that off. They would rather push their Atom chips than sell an ARM. Intel wants everything to be IA or didn't you get the memo from a decade ago?

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Re: barely profitable option for ARM

>> "barely profitable option for ARM is to try for the premium market at a price level higher than iPad3"

Let me clarify that for you, first by restoring the part you clipped, and then adding the context created by the previous paragraphs:

"Given these [options and constraints for OEMs] it is likely that the only barely profitable option for ARM [based OEM tablets as distinct from x86] is to try for the premium market at a price level higher than iPad3"

ARM do make profits, OEMs making ARM based Windows RT tablets are unlikely to do so, for the reasons given.

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Re: I don't see them costing that much

Agreed. That's why the Asus Transformer will get yet another sales boost: first Apple with its unexpandable feature-limited walled garden slab, now Microsoft with this. My TF is now 12 months old and stll works perfectly, no need of a cover, no need of an add-on keyboard thanks to its clamshell design. And definitely no need of anything with as daft a name as a Surface, a word which appears to suggest that Microsoft's success will be merely superficial.

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Unhappy

Re: I don't see them costing that much

@Richard Plimston,

What has this go to do with ARM?

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Meh

Re: barely profitable option for ARM

OK Richard, now it makes more sense. But as you know, ARM wins always, unless ATOM gets dramaically better at power managment

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"Contrary to reports, Surface will not be priced $1,000-plus...................

Microsoft has not yet announced any Surface pricing. ..................Back in June it said the Surface "is expected to be competitive with a comparable ARM tablet or Intel Ultrabook-class PC......"

So if I work then out right then its comparable to an ultrabook, arn't they selling for $1000 plus ?

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...but that's the whole shell game being played. Too externally identical devices, both with identical start screens and mostly indistinguishable Metro modes. 2 wildly different prices. A recipe for hoodwinking customers if ever I saw one, talk up the pro device, sell the RT, hope the disappointed buyers don't make too much noise.

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"...but that's the whole shell game being played. Too externally identical devices, both with identical start screens and mostly indistinguishable Metro modes. 2 wildly different prices. A recipe for hoodwinking customers if ever I saw one, talk up the pro device, sell the RT, hope the disappointed buyers don't make too much noise."

You definitely are not a marketing person. Misrepresenting a product is really the last thing you want to be doing for sustained business. Disappointed customers who feel they've been "hoodwinked" are the worst kind of press. What you describe is the sort of tactic a short-term seller like a person in a pub would benefit from, not a long-term business.

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Linux

Where have you been?

> Misrepresenting a product is really the last thing you want to be doing for sustained business.

You are assuming (wrongfully) that anyone is thinking that far ahead.

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Re: Where have you been?

"You are assuming (wrongfully) that anyone is thinking that far ahead."

Given that Windows 8 has probably been in planning, if not active development since before Windows 7 actually started being sold, that comment seems demonstrably wrong.

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FAIL

This will not end well.

The customers who buy the cheaper Arm box thinking "Its Windows, it HAS to run my legacy software!" are going to feel VERY hoodwinked.

And yes it will be their fault for buying it without knowing what it actually IS. But when they find out they have to play double iPad prices to run non-tablet Windows apps, they will be howling. And when the ones who bought the big pad and can run them find out that not onlly is it thicker, heavier and runs hot, but it also has the battery life of a Sega Nomad, THEY will start howling as well.

The whole thing is still a recipe for failure.

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@h4rmony

"Windows 8 has probably been in planning, if not active development since before Windows 7 actually started being sold"

I'll agree something intended to be released as Windows 8 was probably in planning before Vista was launched. Some of the desktop core is probably actually implemented in Win8.

What's actually being released as Win8 only started after Apple started *selling significant numbers* of iPads. Not when they launched because as usual MS failed to believe there was a market. As usual MS are late to the party and as usual using dirty tricks to catch up - in this case screwing over the desktop to cross promote other, non-PC products.

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Anonymous Coward

Or maybe not selling for $1000+

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Joke

"Misrepresenting a product is really the last thing you want to be doing for sustained business."

And yet MS are still around.

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Anonymous Coward

"And yet MS are still around."

Why the 'joke' icon ?

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Linux

Go talk to Detroit

Detroit has played this game profitably for years. 2 models on the show room, one is the top of the line and costs say 40K. The other is the economy line with a base of 30K. The top of the line comes with all accessories standard. On the economy model these are costly add ons. The top of the line model is structurally superior and a safer product. The economy model is less robust, and a more dangerous vehicle to be in.

Detroit makes their money off the consumers who fall for this charade, get the low priced model, and then add accessories to the point that they are spending very close to the top of the line model. They have succeeded in getting the rubes to pay for an inherently inferior product practically the same amount they charge for their best product.

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WTF?

Marketing look farther ahead than the next bonus? When did that start?

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Re: This will not end well? Legacy?

"Its Windows, it HAS to run my legacy software!" are going to feel VERY hoodwinked.

Mmm... I think the majority of non-Business customers are not interested in Legacy Windows SW support. Sales of Mac Books, iPad and Android tablets prove that.

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Re: This will not end well? Legacy?

But its a Windows Tablet, so its portable and the kids will be able to play all their Steam games on it, wont they?

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Coffee/keyboard

"You definitely are not a marketing person. Misrepresenting a product is really the last thing you want to be doing for sustained business. Disappointed customers who feel they've been "hoodwinked" are the worst kind of press. What you describe is the sort of tactic a short-term seller like a person in a pub would benefit from, not a long-term business."

See attached icon.

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Happy

Re: This will not end well.

I'm stocking up on popcorn.

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FAIL

Re: Go talk to Detroit

talking of an 'inferior' product sort of implies they actually have a 'superior' product too?

I don't think so... I've rented a bunch of GM cars and it was awful every time.

In one of the big cars, I think it was an Oldsmobile I rented in Phoenix, they have nifty 'features' like AC vents blowing directly on the drivers knee with no possibility for adjustment or moving your knee out of the way. So, when you try to get out of the car, your knee is frozen solid, you can't straighten it and are forced to limp away...

Lexus wins by default :)

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Pint

Re: This will not end well? Legacy?

I think those who didn't care about regular windows have already gone to Crapple products for the shininess and the perception that Crapple products are used by "smart people" and "creatives", and so if they buy one, they will somehow also be considered smart and creative...

The suddenly so-called "legacy" programs are mostly made for consumers and were either already purchased at fairly high prices or pirated for free. The new Windows RT monopoly will not fly with either of those customers.

And all the I-need-it-super-simple People who will fall for a monolithic walled ghetto scheme are already with the shiny baubles company.

At least those of us who don't wish the open PC market dead can hope that it is so...

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Stop

Microsoft MIGHT jeopardise any working relationship with OEMs by releasing the Surface tablet, but then again they MIGHT actually make the OEMs release a decent product, as they might not want their tablets look like a lame duck against what could be perceived as "the standard".

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Anonymous Coward

Yep...

The only half decent tablet that I'd like to own at the moment is the Samsung Series Seven Slate, it's on the pricey side, though. I'm holding off until I see how much the Intel based surface costs and what it's like - certainly in terms of memory, and what any potential docking station will be like.

If MS kick the tablet manufacturers up the backside, this can only be a good thing, even if you're a die hard Linux or Mac user, because it'll force all the competition to up their game.

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Meh

Re: Yep...

I have a series 7. It's not a bad piece of kit because it's got the grunt for VS2012, but the build quality isn't phenomenal, exactly. The glass is lifting off the frame in the corners. Also, it's $£&ing heavy. Granted, it replaces my little Vaio P-Series, which's only 600-odd grams.

I'm waiting for an ARM Surface. Means I can leave the slate at home, which's where I do dev anyway.

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Joke

Win - Win

Microsoft produces tablet-like-laptops which even appeal to me. It runs Win8, all aimed at touch.

Other manufacturers get so upset and ticked off that they continue to sell PC's with Windows 7 despite MS' demands to stop sales in order to push Windows 8 forward.

I'd call that a win-win situation ;-)

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WTF?

Jeopardise relationships...

I doubt it will do much to harm their OEM relationships...

They already have the OEMs over a barrel, so the OEMs will just have to accept what they're given. Such is the nature of a market where you're dependent on a single supplier.

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FAIL

Hmm

My guess is three years from now WinRT will be as dead as sliverlight and or at best folded into another framework. As for the supposed platform convergence based on the fact the WP8 SDK is MIA so close to launch the next year and half are going to be a train wreck for Microsoft.

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FAIL

Re: Hmm

And for the record I don't consider leaks of alpha quality software as being released.

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Anonymous Coward

Tablets

Well, they are good for consumption, and FaceTime is kinda nice if you have the andwidth, but really if you want to create something a tablet just doesn't cut it.

Of course considering that most people out there only consume, there might be a real threat to Windows.

As for the Linux Fanbois, well... if Linux ever gets it act together maybe. Win and FreeBSD.Apple work, and are supported long term. Just try that with Linux unless the support staff stars back at you (no drool please) in the mirror each day.

Gaming on Linux? Really? In theory killer, in reality DOA. See previous comments and if Newell is serious maybe time to sell Valve stock. Valve would be better served porting to the touchy feely consumer world.

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Anonymous Coward

Re: Tablets

I don't see why this is downvoted?

The touchscreen UI really isn't great for many creative tasks. To imprecise and the keyboard entry takes up nearly half the screen space.

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FAIL

Re: Tablets

Valve is a private corporation.

And Valve's market has no use for a touchscreen in general(gamers).

I dont think you quite understand how Valve operates.

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Windows

OOh! Another "Burning Platform" from Microsoft's esteemed Trojan horse?

“Our Surface devices will compete with products made by our OEM [original equipment manufacturer] partners, which may affect their commitment to our platform."

At least this tablet may just be able to skim the Surface. If thrown hard enough....

Someone needs a severe overdose of Valium. Not me, I think (I need a severe overdose of Viagra).

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It's actually a double shot.

First the OEMs get a boot to the head with MS selling Surface, Then they get a kick in the arse when MS expect them to sell systems with Win8 installed.

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Happy

Re: It's actually a double shot.(@ Tom 35)

It's like the stick & carrot strategy, but with two sticks instead.

But seriously, OEMs will begin considering seriously other non-windows OSs the same minute that their relationship with MS starts hurting their baseline. You know, OEMs also have obligations to their shareholders.

The funniest part of this is watching Mr. Ballmer et al waltzing into a minefield. Blindfolded and with clown shoes.

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As If

As if PC makers could put Linux on their computers and expect to sell any. Well, to sell more than a few.

So I don't view this as one of the more serious risks that Microsoft faces.

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Re: As If

Ah but after the arrival of smartphones and tablets and smart TVs, if even MSFT are seen as supporting the diversification of platforms then who knows what effect that could have on public perception of computer=windows that they have lived on for so long.

Is it that difficult to imagine say Ubuntu desktops/laptops?

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Linux

Re: As If

Everyone I and my partner have introduced to Ubuntu or Mint loves it. And these are standard everyday end users, from football jocks to the elderly, not "Linux geeks".

It's probably more of a risk for MS than you think.

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Re: As If

"from football jocks to the elderly,"

You must know some pretty unique elderly and jocks - hard to see either of those groups hacking away at a command line with a smile on their face.

Linux has huge potential, but it needs more compatibility and a big dose of user friendliness...

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