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Microsoft Confesses: Surface Tablet Could Impact Partner Relationships

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News Posted: Fri, Jul 27 2012 1:02 AM
Well, at least the collective tech press isn't completely nuts. As soon as Microsoft used a hush-hush event to reveal the Surface tablet (both of them, actually), the first thought wasn't about Microsoft following Apple, or even Windows 8 on a tablet. It was: "What will Microsoft's OEM partners think?" Indeed, Microsoft has survived and thrived for decades on the backs of other companies. What's Windows without an HP, Asus, Acer, Toshiba, Lenovo, Dell or [Insert Partner Here] shell?  Microsoft has steered clear of hardware design and manufacturing (mice and accessories notwithstanding), and it seems logical to assume that much of that decision was simply made to not irritate those all important partners. Or at least that was the model...

In the latest Microsoft report issued to the U.S. Securities and Exchange Commission, Microsoft actually opened up and admitted the obvious: that the Surface tablet may "weaken support for Windows among Microsoft’s partners in the PC industry, known as original equipment manufacturers, or OEMs for short." That's according to the New York Times, who also quotes Microsoft as saying that its Surface devices "will compete with products made by our OEM partners, which may affect their commitment to our platform."
Those notable lines are just a couple in a document that is around 100 pages long, but they're meaningful. Microsoft is being open about the fact that the very partners it relies on to sell Windows-based laptops and desktops will now be competing with Microsoft in the tablet race. It certainly won't be comfortable, and you can bet that Microsoft will have a lot of explaining to do, and perhaps even some concessions to make to ensure steady relationships going forward.

Microsoft's Steve Ballmer and Surface Tablet
Credit: AP for Microsoft                    

Will it be the end to some of those OEM Windows-based laptops and desktops? Probably not, but you can bet a few behind-closed-doors discussions will go down. Perhaps Microsoft will offer Windows licenses for less to partner companies that agree to compete gracefully on the tablet front. But what if one or two of their partners go renegade, drastically undercutting the Surface in terms of price? Fireworks galore, we'd imagine.
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I believe this is a good thing. The only reason why Microsoft did this was because the OEM's were not making tablets the way the customers wanted them vaguely speaking. Microsoft amped up the game. This will help build competitiveness between the OEM's. There's really no difference between let's say if another OEM company spurted up in the middle of the night and started competing against HP etc. It's not like Windows is not selling their OS to these OEM's anymore. It's not like they're being like Apple and cutting off OEM's completely. They didn't cut anyone off, they only added to the competition. Competition is good for consumers.

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3vi1 replied on Fri, Jul 27 2012 3:54 PM

Microsoft did this because OEMs would be insane to pick Windows for their tablets when Android is free and has a ton more traction (and available apps). Why put Windows on the tablet and send everyone to Microsoft's store when you can use Android and make profits through your own OEM store?

What part of "Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn" don't you understand?

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RiCoFrost replied on Fri, Jul 27 2012 5:45 PM

Well in fact Android is not free.... any company that uses Android does in fact pay a fee and the fee does go to Microsoft already. Google android licensing fee to microsoft

I totally agree with xXxDOYLExXx, What Microsoft did is normal, lets face it OEM companies haven't done a great job, Microsoft stepped in to pick up the pace and thank god for that. Good on them I say.

3vi1, you really need to get over this total hatred you have regarding windows 8 i think you will give yourself a stroke. People want tablets but they want tablets they can "work" on and that's why MS made Surface. Surface has been in the pipeline for many years. Androids phone are awesome, androids tables are crap... their really not doing well compared to IPads.

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3vi1 replied on Fri, Jul 27 2012 6:51 PM

> any company that uses Android does in fact pay a fee

False. Microsoft is suing many companies using Android, but they've been suing them over features that arent' intrinsic to Android.  If Microsoft would make public any patent that they feel Andorid steps on, it would be rectified in days.

> you really need to get over this total hatred you have regarding windows 8

Oh, I don't hate Windows 8! I think it's the best thing that happened to alternative operating systems EVER! I mean, thanks to Win8, Linux is getting Steam and Valve games!  I couldn't have wished for a better move on Microsoft's part. But, if you think people won't see that it's designed to bleed money out of them via the app store, more power to you!  I'm not really anti-Microsoft, I'm pro-competition... which at this point involves a lot of anti-monopoly comments.  :)

> People want tablets but they want tablets they can "work" on

And what can you do on a Win8 tablet that you can't do on others?  You're concentrating on the operating system when it's really only the apps that matter.

What part of "Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn" don't you understand?

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JDiaz replied on Sat, Jul 28 2012 5:24 AM

"False. Microsoft is suing many companies using Android, but they've been suing them over features that arent' intrinsic to Android. If Microsoft would make public any patent that they feel Andorid steps on, it would be rectified in days."

Considering most of the contested patents are unknown, we can't say whether they're all not intrinsic to Android. Just the ones we heard about seem to be more design or specific application usage type patents. Otherwise, all we know for certain is that either through suit or agreement MS now collects licensing fees from over 70% of all Android phones.

While, the fact they won at least two cases means at least some of those patents are valid.

Though the 4.1 update should remove some patented code from Android, but it's uncertain if that deals with either or both Apple and MS patents.

"I mean, thanks to Win8, Linux is getting Steam and Valve games!"

Maybe, can't give Win8 all the credit as there has been efforts to get Steam to support Linux for years. However, it doesn't mean the effort will succeed and the rant the guy gave isn't new for him and he's changed his tune before.

So nothing is set in stone yet and ultimately what actually happens has little to do with what we would prefer or want but just how things play out.

"And what can you do on a Win8 tablet that you can't do on others? You're concentrating on the operating system when it's really only the apps that matter."

But it's the OS that determines what kind of apps you can run and what range of features and capabilities can be supported! Neither Android or iOS were ever made to run the kind of programs you can on a desktop OS and just changing the UI doesn't change this!

While full Win8 still supports legacy Windows apps and x86 tablets getting more market share could easily give Windows a performance advantage.

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rear1946 replied on Sat, Jul 28 2012 9:45 AM

Well in fact Android is not free.... any company that uses Android does in fact pay a fee and the fee does go to Microsoft already. Google android licensing fee to microsoft

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