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Canalys says Microsoft Surface tablets will go over like Zune

High praise indeed
Thu Aug 02 2012, 13:31
Man holding iPad and Surface

INDUSTRY ANALYST OUTFIT Canalys is advising original equipment manufacturers (OEMs) to hold off on Microsoft's Windows RT tablets until the firm lowers its licensing fees.

Microsoft's Windows 8 is expected to be the PC software firm's first serious push into the tablet market through its own Surface device designs and Windows RT, a version of Windows 8 that runs on ARM processors. However Canalys said that it has been advising Microsoft's OEMs to hold off on Windows RT tablets until Microsoft reduces its licence fees.

Canalys didn't have anything positive to say about Microsoft's own Surface tablet either, saying that the tablet will be too expensive and calling the company's direct sales channel "inadequate". Canalys VP and principal analyst Chris Jones also said that Microsoft has annoyed OEMs by getting into the hardware business.

Jones said, "Microsoft has upset some partners by bringing its own hardware to market. Marketing, distributing and servicing such hardware profitably is hard. Once the Surface makes a material dent in Microsoft's profit and loss, it will need to repair relationships with PC vendors, who are already preparing lists of demands."

Such was Canalys' apparent disgust for the Microsoft Surface tablet, the firm even compared it to the Zune media player, with Canalys analyst Tim Coulling saying, "We expect the Surface pads to have a similar impact on the PC industry as the Zune did in portable music players."

Canalys suggested that Microsoft take Intel's ultrabook approach and subsidise its OEMs' use of high quality components rather than trying to steal hardware sales out from under them.

Microsoft is playing a dangerous game with its Surface tablets as it relies heavily on its OEMs to buy licences. Sufficiently annoyed OEMs could well look to less expensive operating systems for tablets if they think that despite their loyalty Microsoft has stabbed them in the back. µ


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