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back to article Analyst says Surface could hurt Ultrabook, Windows 8 tablets

Taiwanese analyst outfit Trendforce thinks Microsoft’s forthcoming Surface devices will cannibalise the market for ultrabooks, put price pressure on Android tablets and confuse consumers. The analysts’ WitsView service recently published a note in which research director Eric Chiou says that Surface devices’ 32GB of storage is a …

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failboat

The xbox isn't the number one console by any means. It was clearly beaten by the Nintendo wii and is only just barely beating the PS3. I'd even say that's the worst example to pick.

To his credit he is probably right in regards to its effects on ultrabook and android tablet sales. It goes without saying given how poorly made android tablets are.

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Anonymous Coward

Why not

Just wait until the Surface surfaces, when it does see what transpires.

Speculation makes for great Sensationalist headlines.

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FAIL

Re: failboat

And anyway, those figures will be doubled in the market - this guy shows how everyone needs two: http://www.youtube.com/watch?v=N1zxDa3t0fg

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News Flash

Analyst predicts life on Mars... (and gets 100 lines of press coverage).

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Mushroom

Re: failboat

You obviously havnt seen the sales figures lately. Xbox 360 outsells the Wii now days...and is far more profitable in terms of attach rates. Not to mention 30 million Xbox Live subscribers....

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Re: Failboat

While there are manufacturers exploiting the mad rush to tablet utopia (tabletopia?) by offering up poor quality devices rushed to market to take advantage of the public's feeding frenzy; anything which costs upwards of $350.00 is not of low quality. It is generally a bad idea to buy a $149.00 tablet from a manufacturer whose name you first saw on the box in which your treasure was packed. Ignoring warning signs such as improperly translated marketing blurbs replete with stilted grammar and spelling, and you get what you paid for.

The position that all of the class of tablets that run Android are poorly made is an erroneous syllogism that is pythonesque in nature given that even the revered iPad can run the Android OS.

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Big supposition there...

I doubt that MS will be under-pricing the devices to any significant degree. The logic is slightly flawed - MS do not monopolize the hardware side of their business and other manufacturers can bring lower-cost Win8 devices to market (and they will). So if MS want low-cost Win8 devices out there, they don't have to make them themselves. We don't even know if the Surface will start a long-term product line by MS or if this is just a kick to the other manufacturers to up their game. The latter is a big possibility.

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Thumb Up

Re: Big supposition there...

Indeed it is. Redmond have already said that they will be pricing those two products at similar price-points to where the OEMs will be selling similar classes of products. This suggests that as long as the OEMs do not have the same insane ambitions as they had when the first Android tablets came out (when they were expecting to be able to charge more than Apple were for the original iPad FFS!) MS is not intending to be particularly aggressive towards its own industry partners as far as pricing is concerned. Furthermore Redmond are not in a position to be an "own producer" (without a substantial and expensive strategic shift that would take several years to implement) in the way Apple are and cannot easily take the place of the OEMs as far as that side of the business is concerned. If of course the OEMs are unwilling to read the memo as far as pricing is concerned (the ultrabook segment being largely an unfortunate example at the moment) then things may change in the longer term. However, it won't be this year or next!

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Re: Big supposition there...

Apple are not an own producer. They are in effect the marketing arm of FOXCON, while apple design their goods someone else always produces them. This is a very common scene in many industries. I am unable to see any difference between MS or apple asking an OEM to produce a box and then selling it as their own.

I do wonder what all the fuss is about, slates have been out of use for years and these 'new' versions are a recycling of past ideas of form and function. (School slates of course had rounded corners on their wooden frames for safety reasons.)

The market is currently absorbing these device in respectable numbers but how finite is the market? How far can the recyled ideas go? In other words once all the people who think they want one are satisfied you only have the replacement market to serve. Sunk costs on the aplets mean that as the battery dies, users will tend to replace dieing devices with items from the same maker as long as the aplet can be ported over.

So far as pricing goes, 'free' would probably be too much for me to pay for any of them and as for one with an apple on it, you could not even pay me to take it away.

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Re: Big supposition there...

"Apple are not an own producer. They are in effect the marketing arm of FOXCON, while apple design their goods someone else always produces them. This is a very common scene in many industries. I am unable to see any difference between MS or apple asking an OEM to produce a box and then selling it as their own"

I'd hardly call Apple the marketing arm of Foxcon. Apple are a pretty impressive company that produce all their own software on multiple platforms. I mean these days, Macs are actually Intel machines, but the software and design is what makes them different. But that's really beside the main point which is that there is a very great difference between "MS or apple asking an OEM to produce a box and then selling it as their own". Namely that Apple are the only ones that make their machines. There are many competing manufacturers producing Windows machines. The supposition of the analyst is that MS want to transition to an Apple model, but as another poster points out, it would be a very, very long process to move to a hardware monopoly even if it were possible. So really it looks more like this is just a shot across the bows from MS to get other manufacturers to up their game. It's a win-win for MS. If the Surface sells well, that shows Win8 in a good light and promotes themselves. If other manufacturers up their game and produce something better, that's a win for MS as well.

"I do wonder what all the fuss is about, slates have been out of use for years and these 'new' versions are a recycling of past ideas of form and function. (School slates of course had rounded corners on their wooden frames for safety reasons.)"

When it's time for steam engines, steam engines appear. I recall Neal Stephenson saying that though I think he may have nicked it from somewhere. Basically, sometimes you have to wait for the time to be right. Microsoft were producing tablets and hybrids for years before the iPad came out. They were good for some things, but the technology of the time made them big, heavy things with limited screen sensitivity and responsiveness. Apple timed things just right - they waited until the technology was there for something light and quick and then leveraged their success with phones into a scaled up tablet. It was steam engine time - the conditions for success were just right. You had the technology and wireless internet becoming pervasive and affordable. That's what all the fuss is about. You call it recycling of past ideas of form and function, but you might as well say a modern jet is a recycling of the Wright brother's work. Things like the Surface were not possible ten years ago and if they had been the wireless Internet wasn't everywhere or cheap enough... It's basically a tablet that you can also be productive on. I think it's going to sell great.

"So far as pricing goes, 'free' would probably be too much for me to pay for any of them and as for one with an apple on it, you could not even pay me to take it away."

Well I'm not an Apple user, but I suspect that's hyperbole. They're good machines as far as I can see. At any rate, you've clearly marked yourself as not the target market. Good for you. Rest of us are going to love having a ultrabook light device that we can both work on and sofa-surf on and take notes on with a stylus and have multi-user accounts on and connect standard interfaces to...

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Re: "long process to move to a hardware monopoly even if it were possible."

Indeed. Furthermore that word "monopoly" also has resonance here. Although Apple are very big indeed in tablet space they are still a minor player in pc-space as a whole in terms of the number of units shifted. That means that, for the time being at any rate, the competition authorities are not especially worried. However, Redmond is still the dominant software force in personal computers as a whole. If they attempted to move towards the Apple model (except in a very limited way within tablet space) the bells would not just ring at, for example, the DoJ in the States, they would probably register on the Richter scale. For that reason alone MS would likely be bloody careful before they started any major strategic shift of that kind.

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Windows

well

Givin all the android tablets out there are pretty shootty to, I believe MS see's it as they can't expect them to do anything right for windows tablet so they will do it them selves. On top of fact they gotta to expand their business.

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Anonymous Coward

Re: well

Did you understand a word of what he just said?

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Re: well

The drunk icon was appropriate.

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Anonymous Coward

Re: well

"Givin all the android tablets out there are pretty shootty to"

Samsung Galaxy Note

Galaxy Tab 2

Asus Transformer Prime

On your definition, what isn't "pretty shootty"?

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Re: well

Lemme poot it different, as in googlesoft bad, so Microballmer is right and they need this, so they will have others do it them selves and show how good to their people. That stuff is gonna sell itself and make their stuff seem newer and get big chunk of mmarket. stock gonna rise.

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Law
Thumb Up

Re: well

You missed of f the Nexus 7 too. Excellent wee tablet, sold at near-cost. :)

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Law
WTF?

Re: well

Really? Down voted for suggesting the nexus 7 is a decent tablet?!

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It's possible...

There are so many hypotheticals in this "analysis" that - as usual - it is utterly meaningless.

Yes, MS may subsidise the price - like Amazon and Google already do with their tablets. But, unlike those two, MS doesn't have much in the way of content or services to recoup profits from (they're going to have to bundle Office anyway).

Yes, Surface may disrupt Ultrabooks - but they're just a marketing attempt by Intel anyway, which doesn't look wildly successful at the moment anyway...

This is yet another bit of random speculation dressed up as analysis, enlightening nothing.

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Re: "MS doesn't have much in the way of content or services to recoup profits from"

That is indeed a point. However, I would distinguish here between the Windows RT version of the "Surface" where your point indisputably applies and the Win 8 Pro version where Office will not be bundled with the device.

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Re: It's possible...

Why does no one remember the win app store when discussing win8? Metro apps are locked to the store, Surface gobbles cheap broadband bandwidth so MS get to keep most of their 20-30% cut without mobile carriers charging them. There's a huge pot of gold MS are chasing, enough to make them consider subsidies at least.

I don't believe tbeyll subsidize the less locked down pro version but I don't believe that's more than window dressing for the RT product anyway.

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Mushroom

Re: It's possible...

But they do have a way of recouping profits. The Windows store. 20%-30% of all sales = Microsoft pocket money. And 300 million users of Windows and now adding tablets and Windows Phone means thats quite a lot of pocket money....

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Amazing

Eric Chiou says that Surface devices’ 32GB of storage is a higher spec than that on most ten-inch Android tablets, justifying a higher price of US$599

So let me get this straight the guy is saying it's got more storage than the equivlient androids but it's also going to cost more?

More storage = more money. Wow this guy is a genius he must be the first person to work this correlation out

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Re: Amazing

Indeed. An extra 16GB of flash storage and an extra 3" of screen costs an extra $350 (compared to the $249 Nexus 7)?!?

Surface. Not a snowball's chance in hell at that price point.

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Re: Amazing

Sounds like MS' mark-up on memory will be almost as insane as Apple's.

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Mushroom

Re: Amazing

More importantly it runs Windows so you loose all the security falis of Linux / Android,

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Anonymous Coward

Re: Amazing

Those falis haven't been fed in days. Please don't loose them!

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Windows

Re: Amazing

Except it won't have that much more storage at all, if you don't count the multiple gigabytes of bloat that comes happens when you install windows.

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Great fun expected!

"Taiwanese analyst outfit Trendforce thinks Microsoft’s forthcoming Surface devices will cannibalise the market for ultrabooks, put price pressure on Android tablets and confuse consumers."

I have no idea about how good these devices are going to be, but boy they sound like great fun already... even if I am only going to be a spectator! Maybe *because* I am only going to be a spectator!

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WTF!

I think I will become an analyst, you obviously don't need to know feck all about anything ....

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Taiwanese analyst outfit Trendforce thinks Microsoft’s forthcoming Surface devices will cannibalise the market for ultrabooks

I hope these Surface devices don't mind vegetarian food because there's not much meat on the Ultrabook market to cannibalise if recent sales figures are anything to go by

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NAND flash pricing?

I thought NAND flash cost about $1/Gb in volume in which case why does Eric Chiou imply bump from 16Gb to 32 Gb would add $100 to retail price?

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Re: NAND flash pricing?

I thought NAND flash cost about $1/Gb in volume in which case why does Eric Chiou imply bump from 16Gb to 32 Gb would add $100 to retail price?

Didn't you get the memo? Microsoft are copying Apples business model. That includes charging double for storage than other competitors

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Re: NAND flash pricing?

"Didn't you get the memo? Microsoft are copying Apples business model."

No, this guy is wildly speculating that MS will do an Apple.

Given memory would actually cost about $30, they could probably hit a $499 price point just by forgoing the ridiculous memory markup everyone else seem to favour, without needing any subsidies.

Given MS is starting well behind everyone else, it might be a good idea to hit the same price point as everyone else, but offer more memory - they'll need to offer *something* extra/different to catch up...

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Re: NAND flash pricing?

Going from 8GB to 16GB added $50 the the prince of the Nexus 7!

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XBOX

Since when was it written as all caps? AFAIK it doesn't stand for anything?

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Anonymous Coward

Re: XBOX

http://www.xbox.com/en-GB/

It's right there in capitals on the logo

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Re: XBOX

Short for DirectX Box ;)

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FAIL

Re: XBOX

Right - but throughout the rest of the website when written as text, including instances on that very same page they've used 'Xbox'

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Re: XBOX

Right - but throughout the rest of the website when written as text, including instances on that very same page they've used 'Xbox

you have to remember that this is a company who ran a marketing campaign with "what has information overload done to us" for a search engine. So they were saying when we search we should have find less information?

Microsoft have never been great at branding and marketing. This is a further example. XBOX on the console and Xbox on the site....... Just one example along with their forever changing web based email service and countless other bad branding / marketing decisions

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FAIL

Eh?

Android tablets to be replaced by windows 8? Who makes up these headlines. I guess the same people who think winpho7 was going to replace andoird in phones across the globe.

People don't use Android because windows 8 isn't available, they use android because they want to.

And my 32GB transformer prime is cheaper, with added keyboard dock.

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Re: Eh?

Android is a lovely OS... but I see it as a phone OS. There must be people out there who want a full blown desktop OS on a tablet?

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Re: Eh?

Full blown desktop OS on a tablet? If they do, they'll be sorely disappointed. WIndows 8 RT is not Windows 8, and Metro is a design experiment that belongs on the occasional smartphone, to be fiddled with before going straight back to Go Launcher EX or some other, more usable equivalent.

I believe Microsoft tried XP for Tablets a while back and it was a resounding failure.

And has anybody who thinks Android isn't suitable for tablets even tried ICS on a 10" screen yet? Personally I still like the old 2.x grid of icons, but for people who like being blinded by shiny, ICS definitely has a gleam to it.

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Re: Eh?

Windows 8 RT as you say is the mini Windows but they have also announced a Intel based Surface which will run the normal x64 Windows 8... a full blown OS! And I have my fingers crossed to be able to install Arch Linux on it. Mmmm command line tablet! YUMMY!

I can only dream.

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Re: Eh?

I have an Asus Transformer running ICS - I think the device is great and I love the OS. ICS is a great tablet OS. However, I wouldn't recommend it or any other Android tablet to anyone else. I spent quite a bit of time with a friend's iPad and I would pit ICS against iOS anyday but the range of apps available for the iPad is in a different league. Both in quality and quantity the things you can get the iPad to do, and do well, it light years ahead. A lot of good quality iPad apps are either simply not available on Android (and their equivalents poor in comparison) or they are available either solely for phones or in a format which is basically a phone app with some minor modifications for a tablet (which looks kind of okay until you see how much extra work they've put into the actual iPad app).

Sorry, the OEM's for Android tablets have done a really bad job in getting decent tablets out there at affordable prices - and by "out there" I don't mean that they exist, I mean that they are in front of the general public and therefore likely to be bought. Go to Argos / Comet / Currys etc and see just how many models are out there on display, available to be played with and at what prices. And check Amazon - or a myriad of computer box shifters like Ebuyer or Misco. The Android tablets are sporadic, badly marketed and often over priced. Combine the shortcomings of the apps and the OEM's and Apple is essentially sitting pretty in the tablet space. If MS are successful with their offerings it will most likely be Android that gets squeezed, not Apple.

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Mushroom

Re: Eh?

Windows Phone will replace Android - give it a few years...

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Stop

Yes but...

you'll have paid the MS tax on it, and it will count as a sale to MS, not anyone else...

Do you plan to try and reclaim the MS tax?

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Windows

Re: Eh?

Windows Phone doesn't have a few years.

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From my point of view... IF the Surface is a success (which I do hope) we won't have a need for ultrabooks! The tablet will finally replace the Laptop. The world has just been waiting for a decent tablet with a real OS and not a phone OS.

My fingers are crossed for a tablet which will take Windows and Linux dual booting and which is as sleek as the iPad. Mmmmm <3

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Facepalm

Price pressure on Android tablets?

At $599 I don't think so.

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