Microsoft Could Be Strong Tablet Competitor, Says Exec

Microsoft could eventually become a strong competitor in the tablet PC market, despite the sales success of the Apple iPad and manufacturers' planned use of Google Android on a number of upcoming devices. That was the pronouncement of one Microsoft executive, who sought to draw a parallel between the tablet PC market and the netbook market, which is currently dominated from a market-share perspective by Windows. Asus recently announced two tablets running Windows 7.

Microsoft is publicly suggesting that, despite the early dominance of the Apple iPad and news of strong Android competitors in development, Windows could eventually become a dominant force in the tablet PC space.

"There are always lots of noises at the beginning of a new category," Steve Guggenheimer, a corporate vice president at Microsoft's Original Equipment Manufacturer Division, told the Wall Street Journal June 1. "Windows has proven to be a phenomenal platform for our partners to make money... They know we are going to continue to build support for the operating system."

Taking a swipe at Google Android, which will run on a number of manufacturers' tablet offerings by the end of 2010, Guggenheimer apparently said: "There are two things you have to look at: Is free really free, and what does that mean over time?"

He also cited the netbook market, in which Windows eventually took a dominant market share, as an example of how the tablet market could eventually progress in Microsoft's favor. "It was 95 percent not on Windows, and three years later it is 95 percent on Windows," he said, according to the Journal.

However, the landscape between netbooks and the nascent tablet market boasts some substantial differences. In the case of the latter, the Apple iPad has already managed to seize a commanding market share, with sales of 2 million units since its April 3 general release; in addition, Google Android is also expected to become a strong competitor in the space later this year.

Acer and Dell have both unveiled tablet PCs that run Android, and Hewlett-Packard-which previously announced its own version running Windows-will likely use the newly acquired Palm webOS in its own offering.

That combination of early aggression by competitors, and the willingness of Microsoft's manufacturing partners to consider tablets that run competing operating systems, could alter the tablet PC market's evolution in ways very different from that of netbooks. At the very least, it could somewhat strain Microsoft's relationship with some of those manufacturers.

"This [Palm] acquisition will stress HP's relationship with Microsoft, but given the company's scale and likely continued support of Windows 7 Mobile, it will not seriously damage it," research firm IDC wrote in an April 28 report.  

Nonetheless, other manufacturers evidently see porting Windows onto their tablet offerings as the best way to seize market share of their own. Ahead of Taipei's Computex conference, Asus released specs and photos of two upcoming tablets that will run Windows 7.

In addition to Windows 7, the Eee Pad-which will supposedly come in either a 10-inch or 12-inch model-will support Adobe Flash, and include hardware such as a USB port and camera module. Asus did not offer a release date or pricing.

But ultimate success for any company in the tablet space may come down to its software offerings, and having enough applications on offer.

"It's all about the platform if [Asus] really wants to do well in this field," Edward Yen, an analyst with UBS, told Reuters May 31. "I'm sure the hardware is fine, but the biggest question now is how it's going to attract enough users to create the critical mass needed for an app store."