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Newman notes that Google is following a similar path, and that both companies are drawing their inspiration from the same well:
"We believe that any intersection between human and machine can be made better when all aspects of the experience--hardware and software--are considered in working together," Microsoft CEO Steve Ballmer said at the Surface press event. You could probably attribute that quote to Steve Jobs and get away with it.
Microsoft's not the only company that's taken a liking to Apple's approach. Google also intends to build more of its own hardware. A new Google-branded tablet, manufactured by Asus, may be announced next week at the Google I/O developers conference, according to numerous reports. Several more Google devices, including new Nexus phones, are also reportedly on the way. Don't forget that Google now owns a hardware maker, Motorola, which may start churning out its own Nexus hardware in the future.
The optimistic tone is noteworthy compared to the cautious, skeptical tone of just about everyone else in the industry (Gizmodo excluded).
Dedieu is a by-the-numbers kind of analyst, who whips out the charts early and isn't afraid to extrapolate.
For Microsoft to maintain their profitability, they have to find a way of obtaining $80 of profit per device. Under the current structure, device makers will not pay $55 per Windows license per device and users will not spend $68 per Office bundle per tablet. Price competition with Android tablets which have no software licensing costs and with iPad which has very cheap software means that a $300 tablet with a $68 software bill will not be competitive or profitable.
However, if Microsoft can sell a $400 (on average) device bundled with its software, and is able to get 20% margins then Microsoft is back to its $80 profit per device sold. This, I believe, is a large part of the practical motivation behind the Surface product.
Didieu is a master at analyzing Apple's moves. It's less clear that his math is as well grounded for Microsoft's very different business.
A good old-fashioned rant. I am sure the first draft had some cuss words in it:
Am I the only person who believes this thing is a total jump the shark cluster-you-know-what for Microsoft?
What are the OEMs supposed to do? Well I suspect that if you are someone like a Lenovo or a Hewlett-Packard, you probably are seriously going to re-think whether or not you really want to produce tablets with similar specs to the Surface RT and Surface Pro.
You now have to out-value the Surface devices, or you have to play the Enterprise game with beefier, more expensive Windows 8 convertible tablets with higher-res screens and faster CPUs and SSDs that nobody other than select Fortune 500 firms may want to buy, because they’d rather do business with a hardware partner they already buy systems from.
Cranky. But thought-provoking.