It is one of the most famous predictions in technology. At the 2001 Comdex show in Las Vegas, in front of an audience of 15,000 people, Microsoft's chairman Bill Gates described his vision for the future of the PC.
Showing off a prototype of Microsoft's tablet device Gates said: "The tablet takes cutting-edge PC technology and makes it available wherever you want it, which is why I'm already using a tablet as my everyday computer. It's a PC that is virtually without limits--and within five years I predict it will be the most popular form of PC sold in America."
He was wrong.
It's only now, in 2013, thatfor the first time - and it's not Microsoft's technology that has inspired the shift, but the .
At theMicrosoft will start selling its latest and most ambitious attempt to crack the tablet market--the , a high-end tablet device aimed at business users who might otherwise buy an .
The launch of Surface Pro comes just three months after the, aimed at consumers.
Microsoft's latest assault on the tablet market is vital to the company's future, because now the stakes are higher than ever. Shipments of PCs, Microsoft's traditional heartland, are in decline, while those of tablets and the closely allied smartphones are seen as key areas of growth for software makers--and Microsoft is playing catch-up in both. This time, after a decade of repeated false starts, Microsoft has to get this right. And that means rethinking its most cherished product: the Windows operating system itself.
Microsoft's early history with tablets
For nearly two decades, Microsoft has been attempting to popularise tablet computing. It published Windows for Pen Computing 1.0 in 1991--a software suite for Windows that was designed to add pen computing capabilities, such as an onscreen keyboard and notepad program, to the OS.
One of the early tablets that ran Pen for Windows was the NCR 3125. Adverts at the time showed a chunky monochrome gadget that can "automate handwritten forms, recognize graphic information and transmit it anywhere in the world via modem".
Weighing in at around 1.8kg (more than twice the weight of an iPad today) the NCR 3125 cost $4,795 (which could rise to around $6,000 with add-ons--the equivalent of over $14,000 today), which meant it was hardly a mass market or consumer play.
Unsurprisingly, the tablet market was tiny at the time, with device shipments in the region of tens of thousands a year--if hardware makers were lucky.
The era of the Tablet PC
But Microsoft's interest in the tablet market had only just begun; by November 2000, at the Comdex show in Las Vegas, it was demonstrating something it called "Tablet PC" with the aim of having the devices available in 2002.
Microsoft's perky-looking prototype featured a built-in pen and was intended to be the primary device for business users who spent part of their day away from their desks.
Adding wireless and Bluetooth to tablets made them a more viable business tool than their predecessors, and improvements to display quality and battery life also helped make them a more attractive buy.
Microsoft insisted at the time it had learned from its tablet experiences of the previous decade: "Relative to our own Pen Windows initiative in the mid-1990s, for example, we've learned to look at the complete user experience rather than simply building support for the pen into the operating system," said the executive in charge of the project.
A year of Tablet PC development later, and Gates took the stage at the Comdex trade show in bullish mood, making his grand pronouncement about the future of tablets, and showing off prototypes of the Tablet PC from manufacturers such as Toshiba, Compaq and Fujitsu.
Over the next year these devices gradually appeared in the market, running.
But they were still heavy and expensive and mostly aimed at particular business markets--education and healthcare for example--where being able to fill out forms electronically would be useful.
Microsoft's perky-looking prototype featured a built-in pen and was intended to be the primary device for business users who were away from their desks
"The promise of handwriting recognition still outpaces the reality," said ZDNet UK reviewing one 1.85 kilo, £1,799 device. "The actual handwriting recognition was infuriatingly unpredictable: amazingly good one minute and completely useless the next, just words apart."
Unsurprisingly, with expensive and infuriating technology, the Tablet PC failed to take off as Gates had promised. The underwhelming technology, coupled with poor marketing, the high cost of licensing the operating system from Microsoft, and a limited choice of models, meant there was little demand.
Tablet PC sales struggled to climb above a few percent of notebook sales — in Europewere shipped in total during 2003.
Still, performance gradually improved and the prices slowly came down, although tablets--despite Microsoft's best efforts--remained an expensive niche product.
The ultra-mobile PC and Courier
As well as the tablets aimed solely at business users, Microsoft made a few forays into the consumer space with touchscreen devices.
In 2006 it unveiled Project Origami, an effort to popularise 'ultra-mobile PCs'. UMPCs, as they were known, were a set of smaller form factor touchscreen devices aimed at consumers. The mini-devices still ran full versions of Vista and XP, and fell somewhere between laptops and PDAs.
However, as CNET said at the time: "Thanks to clunky interfaces, high prices, and poor battery life, we have yet to see one that we'd consider useful in day-to-day real-world situations", adding: "the UMPC is still largely an idea in search of a purpose". The devices struggled to find a market and were no match for the low-cost netbooks that were also appearing at the time.
By late 2009 Microsoft was ready for another swing at the tablet concept...
...this time with something that actually looked good.
A video of a concept device known as Courier leaked showing a dual 7-inch screen booklet device with pen and multi-touch capabilities. On the back cover was a camera, with the device charged through an inductive pad.
Unlike the many other Windows tablet devices that were released and shouldn't have been, the Courier really should have made it into shops. However, its development appears to have stopped at the concept stage, despite the considerable excitement it generated as a result of its unusual form and slick design.
The dawn of the Slate PC... and the iPad
At CES in 2010, it was CEO Steve Ballmer's chance to reboot the Microsoft tablet PC once again, this time talking up a "Slate PC" form factor. Ballmer showed off three prototypes--none of which, alas, were the Courier--but rather devices from HP, Archos, and Pegatron.
Ballmer used his CES keynote to give the new hardware a boost: "We're talking about something that's almost as portable as a phone and as powerful as a PC running Windows 7. This emerging category of PCs really should take advantage of the touch and mobility and capabilities of Windows 7, and are perfect for reading, for surfing the web, and for taking entertainment on the go," he said.
But industry watchers were less impressed. "These slate devices were basically just full Windows 7 PCs in a small form factor with touchscreen functionality and no hardware keyboard. There wasn't anything particularly innovative about them, even though the hardware designs were very attractive," said Jason Hiner at the time.
And then everything changed.
In early April 2010, Apple unveiled its iPad. The device became such a runaway success that for several years afterwards there was no tablet market--just an iPad market. Other hardware manufacturers looked on enviously.
After the iPad launch, Gates fielded a question from The Boston Globe about the iPad, responding: "Tablet computing is an innovation where Microsoft has been ahead every step of the way. So, you want to look at tablets and touchscreen and how students use those, that's a Windows phenomena."
Few would agree that the momentum was with Redmond, however--despite Microsoft's long heritage in tablet computing, it was Apple's tablet that grabbed the popular imagination and ran away with the market, helping tablet sales to outstrip those of laptops (see chart the chart from NPD DisplaySearch below).
Windows tablets had never managed to break out of their business niche. And now, what was worse--not only was the iPad being bought by consumers, it was also being bought by businesses.
Where did Microsoft go wrong?
Part of the problem for Microsoft was timing. A decade ago, even the most up-to-date hardware and components made tablets heavy to hold and clunky to use--tablet makers' aspirations were hobbled by the technology that was available to build them.
Hardware, combined with pricing, made it hard for tablets to succeed--they would be a tough sell for any company. But much of the problem was one of approach--an approach that Apple neatly swept away with the iPad: "Microsoft was trying to build a tablet touch or pen interface onto an operating system that was not designed to be used that way and with applications that are not designed to be used that way. Apple didn't take Mac OSX and add tablet features to it, they brought out a totally new operating system with totally new applications," Gartner research director Michael Silver says.
"Rather than think about these devices as PCs and the Swiss army knife approach the PC represented... what Apple did was think of this as a scaling up of the smartphone and the user experience paradigm used there," Tony Cripps, devices and platforms analyst at researchers Ovum, adds.
In other words, Microsoft's mistake was to assume that all tablets are PCs, and thus needed a PC operating system; an assumption at the heart of its insistence on using desktop Windows software to run tablets. After all, if all you have is a hammer, everything looks like a nail.
Windows 8--a new era for Windows tablets?
The success of the iPad (and the iPhone), plus the Android devices at the lower end, has finally forcedfrom Microsoft.
It has turned to building its own devices, the Surface RT and Surface Pro--a change of pace for what has traditionally been a software company that left device making to others. That Microsoft has felt the need to build its own hardware is a reflection of how underwhelmed the company has been by the efforts of its partners--and how important the tablet market has become.
"There was a lot of scepticism around the idea of Microsoft getting into the hardware business. I think they needed to shake up their licensees as far as design and what was possible," said Cripps.
"When you look at the products they've created, they are reasonably innovative--in a time when it's very hard to distinguish one from another there is some genuine new thinking around Surface."
But the biggest change is inside. Windows 8 has placed the touch interface (previously known as Metro) at the heart of the OS for all devices, not just tablets.
That's a big change, and one that could make all the difference to the success of Surface. After a decade of trying to squeeze desktop software onto tablets, it's now software built with tablets in mind that is taking over the PC.