Microsoft admits Surface tablet debacle

PC vendors – including Hewlett Packard (HP) – are up in arms over Redmond’s recent decision to enter the lucrative tablet market with its indigenously designed Surface devices.

The ongoing furor prompted Microsoft CEO Steve Ballmer to reassure jittery partners that Redmond’s recently unveiled Windows 8 Surface tablet is simply a “design point” – rather than a competing device.

“It will have a distinct place in what’s a broad Windows ecosystem,” Ballmer told attendees at Microsoft’s recent Worldwide Partner Conference. 

”And the importance of the thousands of partners that we have that design and produce Windows computers will not diminish.”

Unsurprisingly, Ballmer’s attempts to assuage vendor concern were followed an official admission that its upcoming Surface lineup could weaken support for Windows 8 among Microsoft’s partners in the PC industry.

In an annual report submitted to the Securities and Exchange Commission (cited by the New York Times), Redmond said: “Our Surface devices will compete with products made by our OEM partners, which may affect their commitment to our platform.”

It should be noted that a number of journalists and analysts had previously expressed concern over Surface, including Chris Whitmore of Deutsche Bank who warned the tablets would alienate Redmond’s longstanding PC partners. 

Meanwhile, Charlie Demerjian of SemiAccurate said he believes Microsoft has “utterly failed” in the lucrative mobile space, as is illustrated by the less than stellar sales of Windows Phone 7.

“[However], rather than learning from their past mistakes, [Redmond is] repeating them for tablets. Taken together, it is painfully apparent that Microsoft management does not comprehend mobile computing,” Demerjian wrote in an extensive analysis published earlier this month.

“Instead of modifying their strategy to deal with the new realities that face them, they are circling the wagons ever tighter to disastrous effect. The question now is not if the mobile plans will work, they won’t, but how much the repercussions will end up costing.”