On track to sell 63.3 million units by the end of this year, the white-hot tablet market is booming, and so far leaving Microsoft in the dust. But at the Microsoft BUILD developers conference in September, the company showed signs of life with a next Gen Windows 8 platform and the new Metro interface running on tablets that’s meant to compete in earnest with the top selling iPad. Here's how.
The stakes are high for Microsoft. As early as May 2010, Forrester’s J.P. Grownder and Sarah Rotman Epps wrote in The Windows 7 Tablet Imperative: 'Tablets are the next important computing form factor. Microsoft needs a partner to produce a successful Windows tablet that competes with the Apple iPad. At stake is nothing less than the future of the operating system (OS).'
Even with iPads selling like gang-busters, it’s important to remember that a full 90% of all PCs sold still ship with Windows OS. So it’s not surprising to learn that a recent Boston Consulting Group study found that a whopping 42% of US consumers prefer a Windows operating system on a tablet. The study ranked Apple’s iOS second at 27% and the Android OS garnered 20% of respondents, ranking third in the study. In China, consumers ranked Windows, iPad and Android at 44%, 34% and 18% respectively.
Research firm Forrester backed up the US consumer preference for Windows claim in August. Sara Rothman Epps reported that the number of consumers wanting to run Windows on a tablet was 46% of the respondents in the August 2011 survey. Her numbers ranked iOS at just 16% and Android at 9%, according to reports in All Things Digital.
Beyond consumer's comfort with the Windows brand, corporate customers want a Windows tablet that maintains OS consistency across the enterprise. They are also traditionally more comfortable with the management and security tool set. At the BUILD conference, Microsoft CEO Steve Balmer made the corporate position clear, stating: 'The first thing, which I hope is obvious, about our point of view is Windows is at the center [and] I think it's an exceptionally good idea.'
Re-engineering Windows – The Move to ARM
But Microsoft doesn’t have your father’s version of Windows in mind for next generation tablets going forward. To deliver a viable rival to iPad, the device must be fast, quiet, cool to the touch and offer respectable battery life; this is very much unlike the early day hot, noisy Tablet PCs with coffee break boot-times, with either a much too heavy battery or one that required frequent recharging.
To get there on the iPad, Apple changed the class of processor running tablets, using up-scaled Smart phone ARM core chips rather than traditional Intel x86 processors. This was one of the truly disruptive approaches to the tablet, which led to the success of what Steve Job’s characterized as the 'second screen' device.
Microsoft followed this innovation with the announcement at the BUILD conference of a re-engineered Windows 8 Metro that would run on ARM-class processors. On cue was NVIDIA, who announced at the event that all four of its processor brands will support Windows 8. This includes the next-generation, quad-core Tegra processor, code-named Project Kal-El, an ARM-based system on a chip (SOC) meant to power lightweight, energy-efficient tablets and notebooks, looking to rival the market-leading iPad.
NVIDIA Quad-Core Kal-El ARM-based SOC
The move to ARM for Windows in the tablet space is monumental. NVIDIA’s Sr. VP Jeff Fisher said, 'With its elegant user interface and support for tablets and notebooks using ARM-based processors, Windows 8 will bring a seismic shift to the industry.'
Beyond Windows Phone 7
On the software UI side, Metro is pure Windows under the hood, but looks very much like the highly acclaimed Windows Phone 7. The system is optimized for touch screen input, and has received favorable notices from users who tested the new OS at Build. The company '…has gone a lot further to integrate touch into Windows this time....The changes are system-wide and obvious. Everyone who uses Windows 8 on any form factor will see its tablet features,' Blogger Sumocat wrote after test driving the new OS at BUILD.
The BUILD conference was considered a success by Microsoft, with Balmer touting the 500,000 downloads of the Windows 8 Developer Preview that occurred within 12 hours of the announcement. It’s a sophisticated approach that should go a long way to please customers and developers alike.
Back in 2009, Microsoft did develop a creativity tablet called the 'Courier' from a group headed by J. Allard, brainchild of the Xbox, and Robbie Bach. The tablet boasted two screens and focused on content creation as opposed to iPad’s focus on content (multi-media) consumption. The story first broke in 2009 on Gizmodo.com.
Balmer decided to kill the project in April 2010 (just one month after the iPad began to ship) because the device wasn’t strategically aligned with the core Windows/Office technologies. For example, Courier purportedly didn’t offer any version of e-mail, which was said to be a turn-off to Microsoft founder, Bill Gates.
Even with the 40-plus million iPads sold as of September 2011, Microsoft isn’t a company to fret about not being a first to market player. Part of the long successful strategy of the company is in being a 'market follower' rather than innovator like Apple and its recent announcements in moving Windows to support ARM processors is just one example.
Also, with its market cap at US$ 213 billion to Apple’s US$ 360 billion, Microsoft is still in the game and its second to market follower strategy is working. For its part, Microsoft listens well to consumers and eventually, over a seemingly endless iterative process, improves its products until they get it right. They are smart, savvy and opportunistic. Apple will continue changing the world, while Microsoft watches and positions itself (and stockholders) to benefit.