Microsoft (NAS: MSFT) is hoping that Surface -- the specs-rich tablet that it will begin selling on Friday -- finally makes it a legitimate player in the booming tablet market.

There are a few reasons to get excited.

  • Microsoft is hitting the airwaves with an ambitious marketing campaign.
  • The devices come installed with Microsoft Office at no additional cost.
  • The magnetically attached keyboard covers are pretty cool.

However, there are also plenty of reasons to be worried.


1. The price may be too high
The Surface -- without the keyboard cover -- starts at the same $499 price point as Apple's (NAS: AAPL) iPad. Why? If Microsoft is serious about gaining market share early, shouldn't it be making setting itself up as the smarter economical choice?

Matching the iPad price will only force potential buyers to compare the two devices, and that's something Microsoft may not want right away, given the developer-backed ecosystem of Apple's App Store.

2. Windows 8 RT licenses may be too steep for its hardware partners
There could be a very good reason for the stiff starting price.

Tech site VR-Zone asked vendors at Asia's Computex convention what Microsoft was quoting them for a Windows RT license. This is the scaled-back operating system that the ARM-powered Surface is using. The quoted prices ranged between $80 and $95. Ouch!

That's pretty steep for tablet manufacturers that can just get Google's (NAS: GOOG) Android for free as an open-source solution. They will have to bake that cost into the retail prices for their Windows 8 RT tablets, and perhaps Microsoft is simply doing them a favor by charging so much for the Surface.

It's not doing consumers any favors, though.

3. Microsoft's biggest fans may hold out for the Windows 8 Pro models
Early adopters want the best, and they're willing to pay up and jump through hoops to get it. Well, they'll be out of luck come Friday. It's just the ARM-based Surface that's hitting the market. The Surface models powered by Intel (NAS: INTC) to handle the horsepower required by the more full-featured Windows 8 Pro will hit the market in a few months.

In other words, diehard Windows buffs may pass until they get the more powerful -- and naturally more expensive -- Surface model.

It's a big mistake to either not have both models out at the same time or to not put out the higher-end model first.

4. The market hasn't been kind to anything but iPads and Android tablets
Consumers want a tablet backed by an operating system that they know will be around for years, and that's pretty important. They knowApple will keep putting out annual iPad updates. They know that Android as an open-source technology has legs in mobile gadgetry.

Why is it that the webOS TouchPad and Research In Motion's (NAS: RIMM) PlayBook sputtered? They hit the market last year at similar price points to what the Surface will be going for. They were selling for less than half that price a few months later.

Microsoft is going to fare better than that. It would be hard to do worse. However, if Android tablets will be cheaper and iPad tablets will be cooler, there has to be more than simply native Microsoft Office support to sway consumers who have been burned before.

5. Zune? Kin? Surface?
Aside from the Xbox, Microsoft hasn't had a lot of success outside its software stronghold. It was patient with its Zune portable media player. It wasn't patient with its Kin smartphones.

Even the name of the new tablet was first used for its expensive touchscreen systems that failed to gain serious traction.

Consumers have every right to tread carefully here, especially when Apple may be stealing Microsoft's thunder a few days earlier with what's likely to be an iPad Mini announcement. Google, meanwhile, just announced a sleek Chromebook selling for half the price of the Surface.

Scratching the Surface
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The article 5 Reasons the Microsoft Surface Will Fail originally appeared on Fool.com.

Longtime Fool contributor Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Google, Intel, and Microsoft. Motley Fool newsletter services recommend Apple, Google, Intel, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


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9 Comments

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mbson

One reason it will succeed:
ITS ****** BAD ASS
I have been using Windows 8 preview for 8 months, and have deleted my Windows 7 Partition three months ago.

October 22 2012 at 8:50 PM Report abuse rate up rate down Reply
Bob Jacobson

I agree with the comment that the Surface needs to have an economic stimulus to cause consumers to consider it a viable alternative to Ipads and Android tablets. Unfortunately, Microsoft priced it about $100 to high. I was considering it as an upgrade to my loyal and sturdy Asus Transformer...but not now.

BJ

October 22 2012 at 2:37 PM Report abuse rate up rate down Reply
Mathew Archer

Rickiswastedcmen it is you who is a waste of time. you are the sort of person who has a go at everyone and anyone just because your a failure at everything and are unable to use your brain to think for yourself. just because someone may like apple it does not mean they are an isheep. you and others say that because your jealous that your much loved android or windows camp are not as good. after all it is not microsoft or android that are flying high right now and it is apple who is the most valuable tech company ever!. who loves steve balmer or even bill gates in the way everybody loved steve jobs? who even knows who the boss of samsung or any other android making manufacturer is? who was as charismatic as steve jobs?
right now apple still make some of the best kit around and if microsoft want to actually make a tablet to compete with the ipad then they need to sell it much lower. i guess they did this in order to satisfy the oem partners. surface is not proven and will not be so for a few years till the ecosystem is in place. meanwhile people will stick with the best which is ipad or next best, android. and by the time microsoft even get a halfway good ecosystem it will be too late and nobody will give it the time of day. dont think so then just wait and watch. microsoft hope to sell a few million of these...i doubt it very much. a few die hard windows fans may buy them then realise its to late. their surface rt tablet they blindly brought wont run any x86 apps/progs and all they can do with it is run windows apps which are thin on ground and as for that usb port it wont run half the devices they think it will...thats what the pro model is for...some smart move dumb****s!
you all ordered a paperweight lol

so i have just proven that the surface is dead in the water!

roll on the end of march next year microsoft surface will be another failure, such an expensive one that microsoft share price will plummet and the share holders will never let microsoft go into hardware again and they would have scored an home goal and given apple a huge advantage lol
lol lol lol lol lol lol
microsoft are idiots!
lol...dont think so then wait and see!!!!!1

October 22 2012 at 3:10 AM Report abuse rate up rate down Reply
RickIsWastedCMEN

Rick astoass sajdjkjkr whatever your pathetic name is.

Sir, you are a waste of semen.

You ******* Apple fanboy. Why are you predicting the death of something that hasn't released.
Admit it faggot, you get paid,

Pathetic you are.

October 22 2012 at 1:34 AM Report abuse rate up rate down Reply
TruthSeeker

You apple iSheep amuse me. The tablet hasn't even hit the stores and yet you are already predicting its failure. I for one think that Microsoft has done a great job here, and I own several apple devices. The tablet looks exciting, fresh and different, unlike recent apple or android products. You fanbois should stop hating and start appreciating innovation, no matter which company brings it. More competition means better products in general. Peace.

October 22 2012 at 1:22 AM Report abuse rate up rate down Reply
HunterGuy2

>>and iPad tablets will be cooler
That's the perception MS is trying to change with Surface. You have to admit, the Surface is pretty damn cool.

>>Matching the iPad price will only force potential buyers to compare the two devices
It's interesting you mention that. If you do a deep comparison of the Win RT features vs. iOS, RT actually comes out far ahead (snap, share, print, search-in-app, live tiles). But most people only compare at skin depth, i.e. appearance of home screen and # of apps.

October 22 2012 at 1:20 AM Report abuse rate up rate down Reply
McLovin

What's with these stupid articles pertaining to " Microsoft's failures" without any REAL BACKING TO WHY ?!
The thing isn't even released yet, like WOW!

I just now pre-ordered 2 MS Surface tablets, and trust me I'm a die-hard apple fan. Then I heard about Microsoft releasing it's own tablet. Things changed dramatically I tell you.

Believe it or not, I'm not the only one who ordered this many tablets. I heard some guy ordered 5 as Christmas presents. I personally think the tablet's pricing are perfect. People will definitely spend $499 for a surface instead of an i-pad.

Admit it, apple failed a bit here. Microsoft is winning this match. You never know, Apple might be able to get their shares back from the market again.

October 21 2012 at 10:08 PM Report abuse rate up rate down Reply
barack

Haters gonna a hate, one garbage article from another.

October 21 2012 at 9:15 PM Report abuse rate up rate down Reply
Matt

This article should be named "5 reasons why the surface MAY fail"... not WILL fail. 3 of the 5 reasons you stated are formed as a possibility, yet your article title is stated as fact. Seems like all these anti-surface journalists like to jump the gun and make claims based on their own opinion and try to sell it as a cold hard fact. The product isn't even out yet. Be patient.

October 21 2012 at 9:05 PM Report abuse rate up rate down Reply