By Evan Dashevsky, dealnews contributor

Microsoft CEO Steve Ballmer wants to make it very clear: his company has what it takes to compete directly with the reigning kings of the gadget-verse. "We are not going to leave any space uncovered to Apple," he said in a live interview with CRN held at the company's Worldwide Partner Conference. "Not the consumer cloud. Not hardware [nor] software innovation. We are not leaving any of that to Apple by itself. Not going to happen. Not on our watch."

Ballmer repeatedly highlighted Microsoft's foray into integrated computing: the Microsoft Surface. The Surface — a tablet-ultrabook hybrid built to run on Windows 8 — will hit the market this fall, and if the unofficial price rumors are to be believed ($599 for the ARM-powered RT, and $1,000 for the beefier Intel-powered Pro model), the hybrid might go head-to-head with Apple for consumers considering purchasing a $499 iPad or a $999 MacBook Air.

The Surface (pictured right) represents a radical departure for Microsoft, which has spent more than two decades developing software to run on other people's hardware. Microsoft was the ubiquitous face of 1990s computing; Apple was a boutique brand for ice coffee-slurping hipster weirdoes. As late as 2000, Ballmer reportedly described Microsoft's philosophy as "last to cool, first to profit." Loosely translated: the company was less concerned with the cutting edge as it was with improving upon the work of others; Microsoft let others navigate new territory, then it swooped in to develop its own version.

And to that end, the company's strategy met some success: the Xbox (built upon the foundation laid by PlayStation), Kinect (via Wii), and even Bing (via Google, which surprisingly holds a fairly respectable 15% share of the search engine market) are household names. Of course, there have been notable failures: Microsoft couldn't give away Nokia's Windows Phone 7. Of the three times we've posted deals for the phone (all of which set its price to free or bundled it with a $50 credit) our readers barely blinked — or clicked. And remember that old "iPod-killer" the Zune? Don't worry, very few people do. (But our very own dealnews Media Editor keeps it alive).

Unfortunately for Microsoft, "cool" almost directly translates into "profit" in the gadget world and the company has little to show for itself in today's mobile market. Apple is the undisputed champion, all the kids are on Facebook, and even Google commandeered Windows' "open" OS role with the Android platform. A story in the current issue of Vanity Fair derides Microsoft's anti-innovative corporate culture as the problem, and dubs its recent run a "Lost Decade."

One thing Ballmer's vision for Microsoft 2.0 does not seem to include is a Windows-branded phone that can compete with the iPhone. When asked specifically about a phone, Ballmer dodged the issue and redirected his focus on selling the Surface and the tablet-tailored Windows 8 OS. "Right now we are working real hard on the Surface. That's the focus. That's our core."

But will this "core" be fruitful? With the cool-but-not-radically-innovative Surface, Microsoft is playing catch up in both tablet and ultrabook games. In another few years these may be quaint technologies as both Google and Apple venture forward with wearable tech. But don't count Microsoft out as a longview innovator quite yet. Take for example their cutting edge interactive 3D desktop prototypes. If the company manages to cultivate truly inspired new products as they did with say, Kinect (and make them available to the public in their Apple-like Microsoft Store), then this lumbering tech giant may yet learn how to be cool.

Readers, what do you think about Microsoft's proposed hardware challenge for Apple? Can Microsoft innovators realistically compete against the kids from Cupertino? And if not, might their stumble result in cheap devices for the budget-seeking consumer? Sound off in the comments below.

Front page photo credit: Trusted Reviews
Bottom photo credit: Shelky Bytes

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Ross

Microsoft is doing nothing different than what Apple has been doing for the past decade. Apple did not invent the mp3 player. They took the concept (which was already available by other manufacturers) and made it their own (iPod). Nor did Apple invent the tablet. Tablets were already available when the iPad came out. Apple created the iPad by making a 10" screen iPod Touch/iPhone. Rarely is Apple really that ground breaking, with the exception of the first iPhone which was very impressive in 2007. They're just taking existing product offerings and (in some ways) making them better; just like what Microsoft is doing now.

July 13, 2012

Seanl

This is funny. Once again Microsoft is worried about Apple so they feel a need to follow along. This is not innovation.

portbcv

I guess, how can you be a visionary, when you are going to copy off of the tablet tech leaders? Microsoft, stay with software, and gaming, and leave the heavy lifting to the experts. Brown turd Zune anyone?

mitsured

I see Apple as what Sony has always wanted to be, Sony had beta and mini disk which were cool ideas though neither really took off. The iPod which morphed into the iPhone which raised the "cool factor" of Apple and drove the increase sales of their other devices does have a relativity short self life if they do not continue to change with the times. Put an original iPhone next to a "new" iPhone and as technology goes it hasn't really chanced much. The iPhone came out in 2007 for comparison look at TV technology changes and prices from 2007 to 2012 it really looks like the iPhone is standing still. If Microsoft is going to make a real move into the hardware business this is the time but they have to do more than just increase the screen size. :) Microsoft if your listening I'll take one of these
megranatephone.com/. pomegranatephone[/uephone[/url] :)

July 12, 2012

"If you have to talk about your competition, you are losing."

Like Apple suing Samsung? Apple was "talking" a whole lot about their competition.

atlantafalconsfan89

To form an opinion about 1 man is perfectly acceptable, but it is not valid. Microsoft develops products as a team, and this is them stepping out of the box creating something that is like nothing else. The iPad has gained its reputation for its ease of use, its reliablity, its price, durability, battery life, and "cool" factor. The "cool" factor almost more than anything else. I can say that because if you look at the sales of the first iPad, which no one had ever gotten to even use, there were over 1 million preorders.

What people want, which they are starting to realize, is integration. Apple's cloud service is still not great. Not vouching for windows on theirs being great either, but that will play a part in who leads the pack at the end of the day. Microsoft has xbox, which is something Apple is threatened by. That gives microsoft the ability to take over the home. By integrating Windows 8 with xbox and windows 8 phone, you will have all your content, everywhere. That is why Apple has contacted Valve, they are having to come up with something more sufficient than Apple TV for the long-haul. Sure Roku and Apple tv have apps for tv, but do they have features like kinect? Even if you are not a "gamer" kinect will expand on its technology to provide users with a more useful day to day in-home feel than using a remote control will. Its like having an old flip phone, physically keys are a thing of the past. It creates limitations on what an operating system can achieve.

I have owned several Apple products, I love apple. Microsoft creating their own line of high-class hardware changes that to me though. Now I can have high-end hardware, along with an operating system that is going to universalize my life.

Brian L. Moon (DealNews)

This reads like a brochure.

"The Netflix app for the new Windows OS looks amazing."

I use Netflix for the video, not the interface. And I use a Roku.

"Eventually people will leave apple when they see Windows has answered all of the problems it once had."

As long as Ballmer is there, I won't use Microsoft products. Gates was a great geek. He had vision. Ballmer is a business man. They are now the Pepsi of consumer electronics. If you have to talk about your competition, you are losing.

Brianlmoon, did you see the Microsoft keynote? The Microsoft surface tablet competes directly with Apple there is no question. The difference is Microsoft has a much better interface now thanks to their new operating system. Instead of having stagnate icons that are mere pictures with text, you now have the ability to see live icons with Windows 8 and Windows RT. You will see new inovation on apps that will improve your experience. The Netflix app for the new Windows OS looks amazing. The material the Microsoft Surface is made of is of higher grade quality than the iPad. There is more connectivity, and even for good gesture, a build in hidden kickstand. The keyboard is revolutionary as well. I am not sure I would knock microsoft as "chasing". They are certainly behind in the race right now, but I will bet in 5 years the tables will have completely turned. Signs of that will come within the next year. I love windows phone and Windows 8. Integration with xbox will only further the deployment of their devices. Eventually people will leave apple when they see Windows has answered all of the problems it once had.

"the unofficial price rumors are to be believed ($599 for the ARM-powered RT, and $1,000 for the beefier Intel-powered Pro model), the hybrid might go head-to-head with Apple for consumers considering purchasing a $499 iPad or a $999 MacBook Air."

The ARM tablet won't run all the apps that the Intel tablet will, so I don't see it competing. The case/keyboard is nowhere near the same as a MacBook Air. Again, I think Microsoft is just chasing here and not innovating.

melvynny

Just about everyone has/ will have a cell phone, worldwide--thus if msft isn't there, it isn't anywhere.

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