Did Microsoft throw users under the bus?

A step back

Jason Perlow: Last week, Microsoft announced its Surface Windows 8 Tablet, breaking its 30-year tradition of being strictly a software company.

While the Surface itself appears to be a solid and innovative piece of hardware, its release will have negative repercussions for the entire PC industry.

In essence, by pre-announcing this device, it has created an "Osborne Effect" for the PC OEMs currently working on similar spec-ed tablets and Ultrabooks who must not only license Windows 8 from Microsoft but also leverage the same ODM component and manufacturing channel, putting them at a serious disadvantage on pricing for many models currently planned for the Fall 2012 and Winter 2013 release timeframe.

While my opponent will surely claim victory for end-users which will now have access to a high-quality Windows device directly from the source, the reality is that in the long term, this will have a negative impact on consumers. The first being vendor and device choice, which has always been one of the primary advantages of being a Windows user and a prime differentiator from using Apple products.

If the Surface succeeds, and Microsoft transitions to being the primary source of Windows PC hardware (and possibly even smartphones), the OEM ecosystem will be irreparably damaged. Second, it puts
Microsoft back in the position of monopolist.

All things considered, a transition towards the Surface and other Microsoft-branded hardware would be a step backwards for the consumer, not forwards. And it damages Microsoft as well, because they would be competing in a very low-margin business against a company that is far more skilled at vertical integration than they are -- Apple.
 

Essential transitions

Mary Jo Foley:  I often am critical of Microsoft's product plans and strategies, but last week, I found myself upbeat about how the Softies are trying to right the ship in Redmond.

The coming Microsoft-designed Surface devices (PCs? Tablets? Pablets? TCs?) combine tablet and PC form factors into single systems running Windows RT (Windows on ARM) or Windows 8 (on Intel). Some are whining that Microsoft's decision to sell Microsoft-branded PCs will hurt existing PC partners.  My take: Microsoft is raising the design bar and finally telling its partners it's time to jump over instead of limbo under it. Yay!

On the Windows Phone front, Microsoft acknowledged the feature-rich Apollo OS update is not coming to existing Windows Phones – the 3% of us who jumped onboard early. To those who say they're surprised that many hardware-dependent (multicore, NFC) features won't be available on existing phones, you shouldn't be. This was strongly rumored for months. Yes, Apollo is a platform reset, but one that’s needed to keep Windows Phone competitive.

If you want a viable third alternative to Apple and Google/Android devices in the future, you’re going to have to endure some sharp strategic turns. It's going to be a bumpy ride for a while, but without these transitions, Microsoft's long-term viability was in serious question.