Microsoft Needs Help To Compete In Tablet Market

That last step alone, they feel, could potentially render Microsoft viable for the next decade in the consumer space. But to make any of that happen, the company needs an OEM partner that can create “killer” hardware to pair with a streamlined OS and ecosystem-facing functionality.

“Microsoft must keep HP—the largest player in the US consumer market—in the game and tap into HP’s TouchSmart lessons and assets,” the report states. “Dell, too, is a critical player for the consumer market. Dell will need more hand-holding than HP, as it lacks the TouchSmart experience.” Lenovo, Sony, Toshiba and other manufacturers can also enter the fray through different strategies.

The risk of failure, the report suggests, comes with Apple cornering the tablet market in the same manner as it did the portable media player market with the iPod: “If Microsoft and its partners—or Google—don’t get the tablet product, promotion, price and placement spot on, ‘tablet’ will be synonymous with ‘iPad’ for years to come.”

Microsoft tablets in the works?

One possible Microsoft tablet product, Courier, was eliminated before it could leave the development lab. Based on early concept designs that leaked to the media, Courier involved two multitouch screens connected by a central, booklike hinge; in theory, the device would have allowed users to not only perform traditional functions such as Web surfing, but also take notes or draw longhand.

Despite that, Microsoft has other tablet initiatives in the works—at least according to Gates.

“Microsoft has a lot of different tablet projects that we’re pursuing,” Gates said during a television interview May 3, according to a Fox Business Network transcript quoted by TechFlash. “We think that work with the pen that Microsoft pioneered will become a mainstream for students. It can give you a device that you can not only read, but also [use to] create documents at the same time.”

Other companies’ development road maps for tablets, though, seem to focus more on the use of hands or fingers in manipulating the user interface. And according to one analyst, Microsoft’s intent to spread Windows through the tablet space may encounter headwinds, in those companies’ need to keep tablets’ eventual retail costs down:

“HP’s upcoming Slate tablet was originally expected to run Windows 7 OS, although using Windows 7 would translate to a higher cost to the consumer and could mean more strain on the processor,” Anna Hunt, an analyst with IMS Research, wrote in a May 3 research note. “The tablet market will likely see devices at sub-$250 price points within a year’s time … therefore suppliers must be very aware of lowering costs while maximising performance and end-user experience.”

HP’s use of the Palm WebOS, and other companies’ apparent gravitation toward Android as a tablet operating system, suggests that low cost and maximised performance have indeed become keywords for suppliers. In that case, Microsoft may well be examining how to best streamline Windows 7 for tablets, as well as keep the operating system low-cost for OEMs. If the Forrester report holds weight, then nothing less than Microsoft’s share of the tablet market depends on it.

Ballmer advocates stylus

During an onstage talk at the D8 conference on 3 June, Ballmer insisted that lightweight, keyboard-free devices will run Windows, with customisation depending on the needs of particular products. But he also defended Microsoft’s embrace of a stylus as an input method on touch screens.

“Do we think people want to take notes and draw? What’s the best way to do that? Well, there are different ways to do that, and we’ll support them all,” Ballmer told the audience. “Today, we offer devices that do use a stylus. I certainly believe that people do want to take the things that they do today with pencil and paper and do them with new technologies.”

Ultimately, though, Microsoft seems to bet that the tablet market is still nascent enough to provide the company with an opening to seize market share at some later date.

“The software has not kept up with the hardware here,” Microsoft Chief Software Architect Ray Ozzie said while onstage with Ballmer. “We haven’t yet with touch even figured out what the control architecture should be.”