Sunday, 9 December 2012

Microsoft kept partners in dark about Surface

Microsoft kept its personal computer partners largely in the dark about its plans to launch a competing tablet computer, with some long-time collaborators learning of the new gadget only days before its unveiling, according to people with knowledge of the matter.

The secrecy that shrouded the Surface tablet risks alienating Microsoft's hardware partners, and marks a departure from the software company's tradition of working closely with hardware companies to test and fine-tune every new product.

It also underscores how Microsoft is starting to take pages from Apple Inc's playbook, keeping its cards close to the vest as it works to reinvent its Windows franchise and jump into the hardware business.

The earliest that Microsoft's personal computing partners were told about the tablet was last Friday, just three days before it was shown to the media at an event in Los Angeles, according to sources in the U.S. and Taiwan technology industry who spoke on condition of anonymity.

Windows chief Steven Sinofsky made a round of telephone calls but gave only the barest details on Friday, neither revealing the name of the gadget nor its specifications, two people close to Microsoft's partners told Reuters.

As such, Microsoft's main partners remained "in wait-and-see" mode and had to monitor the news for details, one of the sources said.

Microsoft Chief Executive Steve Ballmer told reporters the company had informed its largest hardware-manufacturing partners about the tablet. A company spokesman declined to say how much of a heads up the partners were given, or to elaborate further.

Sources at Acer Inc and Asustek Computer Inc, the world's fourth and fifth largest PC makers respectively, said the first they had heard of the new tablets was at Ballmer's news conference on Monday.

"No senior executives heard about the news last week," said an Acer executive, who added they were still seeking details. "We're quite surprised."

Acer shipped nearly 10 percent of PCs in the first quarter of 2012, with Asustek accounting for 6 percent, according to research house IDC.

The Surface marks a major strategic shift for Microsoft, ahead of the expected release of its new Windows 8 operating system by the fourth quarter of this year.

Microsoft is now pitting itself as a direct competitor, breaking with a 37-year old model where it had licensed its software to original equipment manufacturers (OEMs) such as Dell Inc or Hewlett-Packard Co, which made the machines.

Competing head-on with PC makers may damage a relationship that has long dominated the computer world, where nine out of 10 PCs run on Windows. Analysts pointed to similar concerns in the Android smartphone world surrounding Google Inc's decision to buy Motorola.

"The strategy may affect the willingness of device manufacturers to work so closely with Microsoft, as it will now be viewed as a competitor as well as a partner," said Andrew Milroy, vice president of ICT Research for Asia-Pacific at Frost & Sullivan in Singapore.

Driving Microsoft's shift, say analysts, is the growing clout of Apple, whose iPad is threatening the market for notebook computers. Notebooks are still largely a Windows business, but its growth is a fraction of the tablet market.

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