Microsoft blamed for making tablets hard to swallow

One year after the launch of the first Windows-based tablet PCs, the market is taking a dive, with analysts and manufacturers blaming Microsoft
Written by Munir Kotadia, Contributor on

One year after Microsoft launched its tablet PC operating system, sales have been disappointing, the choice of models is still poor, and software developers have no incentive to create specialist applications, according to a report by research firm Canalys.

HP, Acer and Toshiba launched tablet-PC hardware at the same time that Microsoft launched its Windows XP Tablet PC Edition, but after a promising start, sales have fallen sharply with analysts and manufacturers blaming Microsoft for charging too much for its operating system.

Chris Jones, senior analysts and director at Canalys, said that Microsoft isn't doing enough to help Tablet PC vendors, particularly in Europe: "Rather than pricing the Tablet PC OS at a premium, adding to the vendors' costs and the end-user price, it should be doing the opposite: subsidising the vendors to help them get the market up and running," he said in a statement.

Last week, Acer's president Wang Chen-tang also pointed the finger at Microsoft for charging too much: "Microsoft should put more effort into working with vendors in marketing tablet PCs," he said as the No. 2 maker of tablet PCs admitted it had sold only 100,000 units in a year, which is just 5 percent of its overall notebook sales.

In Europe, the picture is even worse, with less that 100,000 units shipped in total during the year. According to Canalys, HP is the leading vendor, having shipped around 28,000, which makes up 31 percent of the market. Acer comes in second with 23 percent and Toshiba is third with 16.5 percent. Overall, in Q3 of 2003, shipments fell by 20 percent compared to the previous quarter.

Jones said that while the market for tablet PCs remains small, software vendors will remain reluctant to develop applications specifically for the platform. "If the Tablet PC is to become a significant part of mainstream mobile computing, and we think it can be, Microsoft needs to help its partners invest, promote, develop and expand their offerings," he said.

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