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, that tablet devices are set to outsell laptops for the first time - and it's not Microsoft's technology that has inspired the shift, but the tablet created by Microsoft's arch rival, Apple.
At the end of this month Microsoft will start selling its latest and most ambitious attempt to crack the tablet market--the Surface Pro, a high-end tablet device aimed at business users who might otherwise buy an ultrabook.
The launch of Surface Pro comes just three months after the arrival of the Surface RT tablet, 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 Windows XP Tablet PC Edition.
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 Europe fewer than 100,000 tablets were 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...