Lumia tablets? Surface phablets? Microsoft's tricky new post-Nokia positioning challenges

Lumia tablets? Surface phablets? Microsoft's tricky new post-Nokia positioning challenges

Summary: Microsoft just got another ARM tablet and a new phablet to add to its hardware arsenal. How will these fit with the coming refreshed Microsoft Surface devices?


With its Nokia handset purchase, announced on September 3, Microsoft is going to be taking over not just Nokia's Lumia and Asha phone lines, but also Nokia's still unannounced ARM-based tablet and phablet.


Although the acquisition transaction isn't slated to close until early 2014, the move still means Microsoft is going to have to find a way to position its own Microsoft Surface tablets alongside the soon-to-be-Microsoft-owned Lumia tablets and phablets.

Both Microsoft and Nokia are expected to launch new 10.1-inch ARM-based tablets this holiday season. Nokia's "Sirius" is Qualcomm-based, according to rumors; Microsoft's Surface 2 will be NVIDIA-based, according to tipsters. These two devices will have a few distinguishing characteristics, like different attachable keyboards and different kickstands. Nokia also is expected to launch a six-inch phablet, codenamed "Bandit," running the Windows Phone 8 operating system. The rumored launch event for the new Nokia tablet, and maybe also the phablet, has been September 26.

Microsoft has gone through a lot of gyrations over the past few years in trying to figure out how to position its various mobile device offerings -- its PCs, tablets, slates and phones.

Officials largely abandoned its consumption vs. creation device pitch when it decided to stop hawking tablets based on its Windows Embedded Compact operating system. The company seems to have mostly moved away from the "all tablets are PCs" positioning, too. I've been hearing a lot more from the Softies about marketing its Surface RT and Surface Pro devices as "enterprise tablets" that are ready for business, thanks to integrated Office, a USB port, and keyboard cover. (The Intel-based Surfaces also run existing Win32 apps and can be managed using Active Directory, too.)

So where does that leave Nokia's coming Lumia tablet? Is that another enterprise tablet? And if so, how is that different from the Surface 2? (Or any other Windows RT tablets that may still be on the market as of this holiday season?) And where does it also leave the ARM-based Lumia phablet that's expected to arrive this fall, too?

On a conference call with analysts and press to discuss the deal on September 3, Microsoft's Executive Vice President Terry Myerson said Microsoft is viewing tablets and phones as "a continuum."

"I think it's fair to say that customers are expecting us to offer great tablets that look and feel and act in every way like our phones. We'll be pursuing a strategy along those lines," Myerson added. 

This might have been nothing more than a comment about the increasing number of components that are shared across the Windows and Windows Phone OS -- everything from the common NT core, to the tiled "Metro-Style"/Modern interface, to the increasingly common development platform/framework. It also might have been a passing reference by Myerson, who is now the engineering chief of the new OS division at Microsoft that is in charge of the Windows Phone, Windows, and Xbox One operating systems, to the cross-platform unification steps that are expected.

With the GDR3 update to Windows Phone 8, due this fall, Microsoft will enable OEMs -- including itself -- to put the Windows Phone OS on five- and six-inch devices with 1080p resolutions. (It's GDR3 that's expected to power the Lumia Bandit phablet.) Microsoft also has been rumored to be working on a seven to eight-inch Surface device, but supposedly that device will run Windows 8.1, not the Windows Phone 8 OS. 

Microsoft's next few months on the operating system front should be very interesting. Just a year ago, Microsoft was embarking on an ambitious plan to deliver a new version of its Windows operating system on a near-annual basis. If it continues that strategy, the next Windows OS should be Windows 8.2 due in the fall of 2014. But meanwhile, Windows Phone Blue, the complement to Windows 8.1, isn't supposed to arrive until early 2014, last I or my sources heard. 

Will Microsoft stick with those plans? Will it start releasing more minor, interim updates to the Windows OS on a near-quarterly basis, as it has done this year with the Windows Phone OS GDR updates? Will Windows RT and the Windows Phone OS operating systems become one -- in more than just name? So many questions for the new Microsoft + Nokia team. And so few certainties....

Topics: The Microsoft-Nokia Deal, Windows Phone, Windows 8, PCs, ARM, Tablets, Nokia, Mobility, Mobile OS, Microsoft


Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • Lumia and Surface

    Sell Lumia tablets to consumers without Office at a cheaper price and sell Surface RT to Enterprise/Consumers who wants Office on Surface RT.
    • @ OwlllllllNet

      Any many more combinations -

      #1 Sell Surface Pro convertibles, tablets and ultrabooks to prosumers, SMBs and enterprises.

      #2 Sell Lumia phones to consumers and enterprises.

      #3 Sell Lumia Windows RT tablets to consumers and SMBs and enterprise that believe in BYOD and want to see a companion device to Lumia phone.

      This will bring convergence in scale and implement what Ballmer called the 'One Microsoft' way through the hardware division.

      The most important thing is the supplychain negotiation leverage from the deal which is completely overlooked by most.

      If Microsoft wants a display screen IC supplier to supply x number of high-end IC units for Surface convertibles, then Microsoft can force supplier to reduce price on volume of low-end IC units for Lumia phones. Or Microsoft will change the supplier for Surface convertibles.

      This is how Apple grew to make tons of money across their devices. And why Google makes no money on their hardware devices. And why Samsung makes gazillions of money on their hardware devices. It is one form of economies of scale.

      I think we may be looking at the 3rd most succesful consumer hardware vendor after Apple and Samsung in terms of revenue and profit growth. And I really think it is time to get into Microsoft stock when everyone else is leaving it due to this fact.
      • Yep!

        Totally agree. The Lumia line could be a consumer-oriented device running RT, and you that could help differentiate itself from the Surface name, running Windows 8, which would be geared towards enterprise and pro-level users. Let's call Microsoft!!
        Frank Turner
        • oops

          you that? Sorry, I was excited. Try reading that sentence without the "you" this time.
          Frank Turner
  • They can't really use Lumia as it's NIH via the "real" Microsoft.

    I'm expecting a series of commercial show the new phones with kickstands and dancing office workers promoting the Kin 2. This will followed up in a couple of years with a line of phones targeted at women, call the Burbie 2.

    A phablet line will of course be called the Subcutaneous. (Combine Surface and Kin... you'll get there.)
    • I am expecting a series of trolls

      as I doubt that you are capable of serious thoughts.
      John Zern
    • You're boring.

      Shoo little troll, shoo!

      Back under your bridge, you go!
    • Actually, 'SurfaceKin' would work better

      Since now Nokia is kin to Surface. :) Or maybe SurfaceNok.
      • brainout

        or braingone?
        William Farrel
  • Will buying Nokia delay the release of the Surface 2

    ... while Microsoft repositions with its newly acquired hardware? This tight competition to launch new editions in a timely manner means they can't afford delays. Hopefully Nokia and Microsoft have this all worked out so the release schedules don't change.
    Darrell Webster
    • BAU

      Many merger/acquisitions operate in business as usual mode. Nothing need change in the short term, changing course at this point would likely cost more anyway.
    • Very few things get in the way of shipping at Microsoft

      The Vista screwups were a bit of an exception to that rule, but the lessons from Vista apply here. Ship now, ask questions later.
    • Tegra vs Qualcomm

      The Surface II reportedly has Tegra4 and Nokia's tablet has Qualcomm's 800 series chip. That should be interesting.
    • No

      The deal isn't expected to close until early 2014 after attaining assumed regulator approvals.

      It may affect the late 2014 mobile products, though I think the phones will be very close to Nokia's current internal roadmaps. The late 2014 Surface may have some input from the ex-Nokia folks, but 2015 will be the first joint product.

      If, and I think it's a big if, Microsoft really accepts the Nokia folks into the inner circles. That hinges on Ballmer and Elop, because if it really happens, it will happen at the outset and the Nokia folks have to be protected by the leaders.
  • Surface by way of Nokia?

    Could we see on the next Surface; "Surface by Nokia"
    Could this possibly bring down the price of Surface/Nokia devices? having a well established manufacturer of devices brought into the company could put Microsoft into a better position, as a device company instead of a software company, to improve costs.
    • No

      Microsoft did not buy the Nokia brand, just the Lumia and Asha brands. So they will be Microsoft branded devices with the Lumia and Asha brands.
      • Hmmm. probably, you need a refresher

        They could use the patents and Nokia name for 10 years and which could become indefinitely.
        Ram U
        • Nokia Name for 10 Years?

          I thought it was patents for 10 years, name for two years but ONLY FOR EXISTING products. I think the name use is only meant to transition from existing products to newly named products. They can still use the product names (Lumia/Asha) but I don't think they can create a new Lumia/Asha/Surface/whatever product and associate it with the Nokia name.

          This only makes sense. No company that sells a portion of their business but plans to continue using their corporoate identity would sell the rights to another company to use it for NEW products over which it has no control.

          It also doesn't make sense for the buying company to continue using the selling company's name as they have no control over the reputation of that name.
  • A lot better supply chain management

    is the thing I would expect out of this. Expect more "just in time" manufacturing, I would guess... we won't likely see 5 million Surfaces in warehousing after the acquisition.
  • 7/8...

    Releasing a 10.1" RT tablet is nuts, IMHO, given the existence of Surface RT. What Nokia really needs to do is fill a void in the RT hardware horizon by releasing a 7 or 8" Windows RT tablet that dispenses with the desktop, but in exchange also runs Windows Phone apps. Perhaps now that Nokia is under the Microsoft corporate umbrella they'll be able to do something like that.