Tablet Wars: Is Microsoft Sticking Its Neck Out?

Having struck gold with both the iPod and
iPhone, Apple is generating a lot of buzz about the rumored announcement of a tablet PC at the end of the month. According to reports, Apple expects to ship 10 million units in the device’s first year of release.

Poor Microsoft, who first popularized the tablet PC concept, but whose music and phone aspirations have been pretty much trampled in Apple’s dust, is apparently going to try to one-up Steve Jobs and company with its own tablet PC. According to an article several reports, Microsoft CEO Steve Ballmer is expected to unveil a new multimedia tablet PC made by Hewlett-Packard when he delivers the keynote at the Computer Electronics Show in Las Vegas Wednesday night.

This move, though bold, could blow up in Microsoft’s face, says Rob Enderle, Principal Analyst at the Enderle Group. "Microsoft pitched the tablet concept first at the beginning of the decade and argued that tablets would replace traditional laptops, but they didn’t."

Enderle said there were a lot of reasons why the tablet never took off originally, but now Microsoft is in a position of having this concept successfully rolled into the market by several partners. The expectation, or bar, they have set recently is high if you’ve seen their tablet prototype, the Courier. If executed correctly, the Courier, with its sleek, notebook-style form factor, can steal Apple’s thunder and showcase what Microsoft can do, but if done incorrectly, can leave Microsoft with a black eye.

"In a way this one presentation could set the stage for how Microsoft is run this decade," Enderle said. "In other words this has a substantial potential to be pivotal for both the market in general and Microsoft in particular." 

Denise Sangster, President and CEO, Global Touch, Inc., agrees that this could be a huge announcement. "Ballmer is speaking at CES at 6:30 this evening and he needs a biggie announcement to ‘WOW’ the crowd.  A Microsoft-HP tablet could be just the ticket!  Microsoft and HP have a very close relationship and HP is clearly pushing the envelope and looking to drive new and expanded computing flexibility for its customers."

Sangster says Microsoft has probably the most experience with tablet PCs than any other company but the first generation of tablet PCs failed to set the world on fire. Now that the technology miniaturization is ‘there’ and users are looking for the next big move in mobile computing, she expects this to be a big success if it offers a tablet for writing, ‘flicking,’ and drawing. "We’ve seen the iPod and
iPhone change the market, and I think a really well-designed tablet is long overdue!" 

IDC’s Janet Waxman, vice president of channels and alliances, believes the tablet 

hullabaloo
is largely just ‘business as usual’, and will ultimately come down to the applications available for the devices. She says tablet shipments dropped 25 percent between ’07-’08, because there was no brand name or champion in the market. "Maybe with Apple joining in this will change that dynamic a bit."

Michelle Warren, principal of MW Research and Consulting, concurred. Warren says
tablet PCs have the opportunity to shift the way we use computers, but that
will depend at least in part upon application developers creating new programs.

"Up until this point, the tablet has been a niche product used in specific verticals, like insurance and legal environments. This should open it up to more markets as price comes down. It’s exciting technology, but in terms of use, probably more consumer than business."

What applications become available and whether they are business-focused will determine in large part how much of an opportunity VARs will have with tablets beyond the simple sale of the devices.