Analysts Question Future Of Microsoft Tablet Strategy

Hewlett-Packard confirmed in a 1 July statement that its newly acquired Palm WebOS would serve as an operating system for the company’s tablet PCs and other hardware products.

“Under Jon Rubinstein, former Palm chairman and chief executive officer, the Palm global business unit will report to [executive vice president of HP’s Personal Systems Group Todd] Bradley,” read the company’s missive. “Palm will be responsible for WebOS software development and WebOS-based hardware products, from a robust smartphone roadmap to future slate PCs and netbooks.”

That represents a big step from May, when unconfirmed rumors suggested that the expected HP Slate, a tablet PC running Windows 7 and equipped with video conferencing, had been canceled; in the wake of those rumors, analysts speculated that HP would retool any upcoming tablets to run the Palm WebOS, which was originally developed for mobile products such as the Palm Pre. By confirming that the WebOS will be used for tablets, HP confirms those analysts’ suspicions about Palm.

Touch-Screen Devices

But it also remains an open question whether the manufacturer will also build touch-screen devices that incorporate Windows 7.

Analysts have suggested that the Palm WebOS could affect Microsoft’s plans to enter the consumer tablet market, which has exploded in popularity thanks to the bestselling Apple iPad released earlier this year.

“The Windows PC operating system does not lend itself to a touch-screen tablet experience,” John Spooner, an analyst for Technology Business Research, wrote in a 30 April research note. “Given that no single manufacturer or OS yet dominates the tablet computing space, HP can couple the capabilities offered by WebOS with its own design expertise to become a key player in this emerging market segment.”

Spooner added at the time: “Microsoft itself is finding the tablet PC market more complicated than expected.”

During January’s Consumer Electronics Show in Las Vegas, Microsoft CEO Steve Ballmer revealed a prototype of an HP tablet during his keynote, highlighting its ability to display ebooks and play movies. A few months later, in a post on HP’s Voodoo blog, Phil McKinney vice president and CTO of the company’s Personal Systems Group, suggested that a Windows 7-powered device, equipped with Flash, would provide a viable alternative to Apple’s iPad. Then HP acquired Palm, and the game changed.

Whether or not HP eventually uses Windows 7 in a tablet offering, Microsoft is confronting its own challenges with the form-factor. A number of its manufacturing partners are reportedly considering Google Android as an operating system for their upcoming tablets, and Microsoft recently made the decision to kill its much-buzzed-about Courier project.

Windows 7 Tablets

The key to Microsoft’s possible success in the space, suggest some analysts, is realizing that it will have to make fundamental changes to Windows 7. According to Forrester analysts J.P. Gownder and Sarah Rotman Epps, in a 27 May report on the topic, a tablet-specific version of Windows 7 must offer a “simple, streamlined, guided experience” for users.

“Microsoft and its partners must develop UX shell(s) appropriate to the tablet format to compete with Apple’s excellent iPad experience,” the analysts wrote. In addition, Microsoft and its partners must arrive at an appropriate price point: “If a sub-$499 (£329) tablet offers a bad consumer experience, it will fail. Prices above $750 would almost certainly be too high for a complementary device that acts as a second, third or fourth PC in the home.”

Ballmer indicated during a 3 June talk at the D8 conference that a sufficiently customised version of Windows would indeed run on tablets. He also indicated that a stylus, derided in some circles as an outdated input method, still had viability in the tablet space.

The question at this point, however, is how many of those tablets might be made by HP.