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Will Microsoft's Surface be its next Zune?

A Canalys research analyst predicts the forthcoming tablet's high price will cause it to flop.
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Written by Sean Portnoy, Contributor on
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Though it has some fervent adherents, Microsoft's Zune platform -- hardware players, music store, etc. -- is best known as the butt of jokes about the company's inability to compete against Apple's iPod/iTunes juggernaut. Is Microsoft headed down the same path with its new Surface tablets, which will have to match up against the widely popular iPad?

The answer is yes, according to Canalys research analyst Tim Coulling, who concludes that "We expect the Surface pads to have a similar impact on the PC industry as Zune did in portable music players." That's a grave prediction, especially considering that public sentiment isn't quite as negative about the Surface's prospects.

Why is Canalys so bearish on Microsoft's tablet? Price. Coulling believes the Surface will be priced too high to get traction in the marketplace, not only against the iPad, but also against smaller, cheaper competitors like the Kindle Fire and the new Google Nexus 7. He claims that the "direct sales approach will prove inadequate."

But it gets worse. The UK-based research firm doesn't think the prospects for Windows 8 slates built by Microsoft's manufacturing partners will fare much better, again thanks to pricing: "Canalys has advised PC vendors to postpone launches of Windows RT pads until Microsoft rethinks the high license fee."

Popular sentiment has been more mixed about the Surface, with the tablet being praised for its industrial design and its optional Touch Case cover with built-in physical keyboard. (In fact, Enderle Group principal analyst Rob Enderle has called Canalys' Zune comparison "snarky.") There's also a sense that enterprises would warm to the familiar Microsoft Windows/Office ecosystem the Surface would provide -- at least those who haven't yet committed to the iPad.

Pricing could be a major issue for the Surface RT, the more consumer-friendly Microsoft tablet. If its starting price is in the $500 range, it may have a tough time gaining traction against the similarly priced latest iPad, not to mention the iPad 2, which starts at $399. While the Surface Windows 8 Pro may cost as much as an Ultrabook, corporations may opt for them as a laptop replacement, making them more immune to pricing concerns.

Do you think the Surface will follow the path of Microsoft Zune? Or do you think the company has done enough with its forthcoming tablets to succeed where it did not in the MP3 player space? Let us know what you think in the Talkback section below. 

[Via InformationWeek]

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