Microsoft Pushes Tablet PCs, Windows 7 at CES, but Not Mobile

Microsoft CEO Steve Ballmer displayed an upcoming tablet PC manufactured by HP, and pumped the prospects of Bing and Windows 7, at his Jan. 6 keynote address at the 2010 Consumer Electronics Show (CES). Tablet PCs and e-readers were the hot items at CES for many manufacturers, with many of the devices running Windows 7; however, Microsoft's fortunes in 2010 will be determined by how well it executes its core business, as well as initiatives the company isn't mentioning here, like the much-rumored Windows Mobile 7 operating system.

LAS VEGAS-If there's one thing that the 2010 Consumer Electronics Show will be remembered for, it's as the show where tablet PCs of all stripes made their appearance in the mainstream. Whether as ultra-portable multitouch devices, or else e-readers that perform more traditional computing functions such as Web surfing, tablets proved to be one of the show's more buzzed-about aspects.
The question is, will consumers gravitate toward them?
The answer to that question may not make or break tech companies in 2010, particularly larger ones such as Apple or Microsoft, but it may help determine how PCs evolve in months and years to come. If tablets prove to be a hit, then they'll likely become ubiquitous in the hardware space; if they fail, then this year's CES will be remembered for, among other things, being the flashpoint of a temporary fad.
Tablet PCs earned some buzz for Microsoft at the show. In the hours leading up to Microsoft CEO Steve Ballmer's Jan. 6 keynote address, rumors circulated around the blogosphere that he would use his speech to unveil a tablet PC built by Hewlett-Packard. "Mr. Ballmer will show the as-yet-unnamed H.P. device, which will be touted as a multimedia whiz with e-reader and multi-touch functions," read the New York Times blog posting that started the scuttlebutt; the blogger, Ashlee Vance, cited unnamed sources for his information.
Perhaps taking a page from Apple CEO Steve Jobs, who is famous for waiting until the end of his presentations to announce new products, Ballmer waited until the end of his speech to show off the Hewlett-Packard device.

Click here for more netbooks and tablets shown at CES.

"Almost as portable as a phone, but powerful as a PC running Windows 7," Ballmer said as he held the flat screen toward the audience. "The emerging category of PCs should take advantage of the touch and portability capabilities." The tablet PC, which will be available at an unnamed point in 2010, will be able to surf the Web, and display e-books and multimedia content.

In addition to the HP device, Ballmer displayed-but did not demonstrate-similar tablet PC offerings from Pegatron and Archos.

Click here for more of Ballmer displaying tablet PCs, new HTC phone.

That wasn't HP's only tablet-style device displayed at the show. Following a trend that developed throughout 2009, but which reached something of a head at CES, the company introduced the HP Touchsmart tm2, a notebook convertible into a multitouch tablet by sliding the screen down and over the keyboard. Retailing for $949, the Touchsmart is notable for allowing users to write on a virtual notepad with a stylus, then converting that handwriting into text.

Other devices on display at CES, including the Fujitsu Lifebook T4410, mimicked that ability to transform from a notebook to a multitouch tablet in a few easy motions. Other companies displayed their own unique variations on the theme; Lenovo's IdeaPad U1 hybrid notebook, for example, features an 11.6-inch screen that detaches to become a multitouch tablet running Lenovo's Skylight Linux-based operating system. Powering this pseudo-tablet is a Qualcomm ARM Snapdragon processor.

In addition to traditional tablet PCs, a number of companies used CES to debut e-readers. On Jan. 7, Plastic Logic formally unveiled the Que, a 10.7-inch screen that the company is targeting at business users by emphasizing its ability to download and display Microsoft Word, PowerPoint and PDF documents. Other companies, including iRiver, Freescale, Onyx, Spring Design, Skiff and Marvell, are also debuting e-readers or associated accessories and software. Samsung announced two readers, the 6-inch E6 and the 10-inch E101, at CES.
Many of these companies are attempting to seize on the growing popularity of e-readers, which despite being dismissed by some analysts early in 2009 as a niche product managed to become a hot seller during the holiday season. Occupying much of the public mind share devoted to e-readers is's Kindle line, which the online retailer claims is collectively the bestselling product on its site; in December, an analyst from advisory group Collins Stewart estimated that the company could earn as much as $301.4 million off the Kindle in 2009.
Ahead of CES, announced a new version of its large-screen e-reader, the Kindle DX, with global wireless capability that will allow e-books to be downloaded in over 100 countries. Retailing for $489, the device is scheduled to begin shipment on Jan. 19.
Overshadowing these tablets and e-readers at CES, however, is the rumored Apple tablet PC. Although Apple itself refuses to officially confirm the development of such a device, recent reports have suggested that the company could host an event in San Francisco during the last week in January to announce its existence.
With that in mind, manufacturers' announcements of their own tablet PCs at CES could be seen as either an attempt to capitalize on what they see as the next big trend, or else an attempt to lessen or pre-empt an Apple tablet's effect on the broader market.
In any case, the announcement of a tablet PC was seen by many as the high point of Ballmer's keynote address, which otherwise centered largely on Windows 7, Xbox 360 and Bing. Microsoft's next big release for consumers and businesses will be Office 2010, which is in widespread beta testing. A Microsoft spokesperson told eWEEK on Jan. 7 that some two million people had downloaded the beta version of the productivity suite.
During his speech, Ballmer termed 2009 to be a year of "economic turbulence," but praised Windows 7 as "the fastest-selling operating system in history." Although early analyst reports suggested that Windows 7 sold well in the weeks following its Oct. 22 release, Microsoft has acknowledged that longer-term prospects for the operating system will be largely dependent on PC sales.
With regard to Bing, Ballmer suggested that the search engine in its current state represented "the beginning of a long journey, but we think we're off to a good start." In a separate conversation with eWEEK at CES, a Microsoft spokesperson suggested that Bing's road map for 2010 would include refining its data ingestion process, developing ways to better sense what users want out of particular search, and structuring results more efficiently.
Despite the amount of attention devoted to tablets, though, Microsoft's fortunes in 2010 will depend on other factors. Although Ballmer did not bring up the topic of Windows Mobile 7 during his keynote, the success or failure of that mobile operating system-due to be released at some point in 2010-will determine whether Microsoft can indeed remain a player in the mobile space. Even with the release of Mobile 6.5 in October 2009, which included more robust touch-screen capabilities and widgets, Microsoft has seen its share of the mobile operating-system market fall in the face of stiff competition from Google Android, Apple's iPhone, and other consumer- and business-oriented devices.
Ballmer also mentioned initiatives such as "Project Natal," which supposedly turns the user into a controller for the Xbox 360. Yet even that could be seen as something of a sideshow. If Microsoft wants to reverse its past few quarters of declining revenue, it will need to execute its core business well-no matter what sort of nifty tablets its manufacturing partners, or its competitors, continue to produce.