Microsoft's Surface strategy may force us to find another platform, says Acer
Summary: The manufacturer has warned that it and its rivals may need to look for an alternative platform to Windows if Microsoft seriously delves into the hardware business
Acer head JT Wang has urged Microsoft to reconsider releasing its own Surface hardware, warning that the move will be bad for manufacturers such as Acer.
Wang became the first chief of a PC manufacturer to criticise Microsoft's move, when he told the Financial Times on Monday that Surface risked eliciting a negative reaction from the Windows firm's established hardware ecosystem. The intervention came days after Microsoft itself warned of precisely the same thing, in a regulatory filing.

"We have said think it over," Wang was quoted as saying. "Think twice. It will create a huge negative impact for the ecosystem and other brands may take a negative reaction. It is not something you are good at so please think twice."
Surface is an evolution of the Windows PC, but also Microsoft's big hope in rivalling the iPad and Android tablets — devices that are beginning to supersede laptops for some users, albeit currently a relatively small number.
Wang's resolve may have been stiffened by a recent Microsoft blog post that described Surface as Microsoft's "new family of PCs" — previously, it was just one device that could arguably have been interpreted as a move to stimulate manufacturers to improve their own Windows tablet designs.
In the same piece, the FT quoted Acer's global PC operation chief Campbell Kan as saying Acer was debating whether to "find other alternatives" to Windows, if Microsoft was really making a serious move into the hardware industry.
The first Surface tablet — or rather, two tablets, as one will use ARM architecture and the other Intel x86 — will be released alongside Windows 8 on 26 October.
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Talkback
Don't complain, do it better
HW vendors failed to support the Vista launch (lack of drivers for existing hw and a poor set of new devices), for the Win7 launch things got better but once again they failed to create traction during the Win7 lifecycle and even moved their bets to Android, today HW vendors are partners and competitors at the same time.
Win8 is one of the most important launch for MS, no other time in their history they had so much competing challenges that took away such a big slice of market share. they had to assume the control that they didn't had in prior Windows launchs, so MS elevated the HW standards with Surface and have shown a yellow card to HW vendors passing a subtle message that they expect a stronger commitment.
HW vendors and specially ACER should not look for Surface as challenge, face it as a baseline to construct a better prime device or others that can compete with Android price, not doing so would be a serious risk as they would be left alone, people will go after the purchase of Win8 Pro and RT devices that's for sure!
Re: Don't complain, do it better
The only links in the PC chain still making a healthy profit are Intel and Microsoft. They are coining it hand over fist with nice fat margins, while everybody else has to be satisfied with dregs.
Yes they could, but so far they have choosen not to.
Apple comparison
With MS now getting into the PC / Tablet business I can understand the worry among the other PC vendors. MS definitely has an advantage in not having to pay itself a licensing fee for the OS and Office software. It will be hard for anybody else to compete.
Internal accounting mitigates this advantage
Well, yes and no. It is true that Microsoft produces Windows and Office, so any licensing charge for the Surface tablet will be turned around and recorded as revenue to the software division. It is also still not free - millions of labour dollars go into every new version of Windows being released.
This particular advantage is likely not as prominent as you may think. The most common accounting practise when costing a product line which sources parts internally, is to charge those parts to the product line at a price that those parts would have been sold at in the open market. Because of this, it is most likely that the build cost for the Surface tablets themselves will still include the same cost for the Windows and Office licenses that other OEMs will pay - and that cost will drive the price that will be set on the tablet.
On the other hand, Microsoft does have the advantage of making sure each and every part that goes into the tablet is fully supported and optimized for Windows 8 in ways that other OEMs might not be privvy to. That advantage would far outweigh a $20-$100 savings (depending who you ask) on a Windows/Office license.
ah, Transfer Pricing. The GDP Killer
Whatever margin is in the OS will fall to the bottom line in either case.
So, does this provide some evidence that.....
When someone in a given market starts the race to the bottom, it's really over at that point. Some can try and stay with higher end specs and charge more, but they have to fight the stigma of being a Windows PC at that point and does it make any better business sense to do so?
I don't know but wish one of the OEMs would try this model.
Agree
I don't blame-em
Re: Windows license costs do not set profit margins
Back to Linux
Acer is saying...
Because the market for Android is in...
Idol17
Reducing this license cost to $0 would reduce the cost of a $600 laptop to $530 and a $1299 laptop to $1219.
This would make little difference to the buying public who will happily pay more for a laptop that is pink, or has a rotary volume knob or a 'Beats' sticker, to. There are also millions of customers who will pay 40% more for an aluminum unibody laptop.
economics 101
Acer got itself trapped; no one to blame
Margins?
Nobody knows the Surface Pricetag yet.
They said they were only going top at least "start" selling it in Microsoft stores.
Consider the dynamics on that play!
Of course a rather costly Surface tablet may not be the hugest seller, but it would certainly leave the door open for the OEM's to see how close they could get to that quality for less money. It sets a high bar with a high price so now all the OEM's have to do is try like hell to build it as well as they can for a little less money and perhaps with the economy of scale some OEM's have it could be done.
It would be a potentially great play by Microsoft.
Sound advice
But, there is nothing better than Windows?
That should read: But, there is nothing better than Windows!!!