How Microsoft Can Win Back the Tablet Market

1Executive Summary

It’s the year of the tablet — again. As both a long-time Tablet PC user and a Microsoft MVP in Touch and Tablet since 2007, I’ve heard the phrase “this is the year of the tablet” at least five times now. More than ever, I believe it to be true this year. However, it won’t be because of the company that has, up to now, single-handedly tried to bring tablet computing to the masses.

I’m talking about Microsoft.

Bill Gates demonstrated the first-ever Tablet PC prototypes, built by Acer, Fujitsu, Compaq and Toshiba, at the 2001 Comdex show. The concept later morphed into the Windows XP Tablet PC Edition — which supported handwritten notes and a pen-sensitive screen — in 2004, and the ink features eventually became native to Windows Vista and Windows 7. Yet nine years on, we have never truly experienced the year of the tablet. Why is that?

A tablet isn’t a PC

Until recently, when people referred to a tablet computer, they meant either a slate device without a physical keyboard or a convertible notebook with a swiveling display. Regardless of the form factor differences, you could count on some consistencies — the device ran a version of Microsoft Windows with the ability to ink on the screen, and it was powered by an x86 processor. With that melding of hardware and software, consumers gained pen interaction without having to sacrifice application compatibility or lose any other key features.

Still, most mainstream consumers couldn’t tell you even that much about a tablet — the devices were, and continue to be, far more successful in vertical enterprise niches, such as healthcare and education. Sure, there are some niche markets for the tablets: in our recent survey of more than 1,000 mobile technology enthusiasts, nearly two-thirds of the participants indicated that ink and handwriting recognition were highly desirable functions for a tablet. But these respondents are typically ahead of the curve when compared to typical consumers; while the mainstream is just now learning about tablets, over 40 percent of the poll participants owned a tablet prior.

Sales, not surveys, have shown that consumers either don’t know about the inking and handwriting technology or aren’t convinced that the feature is a must-have. From a consumer standpoint, the Tablet PC is generally regarded as a flop.

Touch computing, however, is readily understood and desired by consumers, thanks to smartphones and mobile Internet devices that have emerged over the past few years. Are these touchable handhelds — the iPhone, iPod touch, and Android-powered devices, for example — any less of a tablet than a full-fledged Tablet PC? If you want the ability to ink on a screen, yes; but the market has proven that most consumers don’t require inking or handwriting recognition. Therefore, these devices play an important role in the development of 2010 as the year of the tablet.

Importance of the user interface

I had high hopes for the newest little Tablet PCs when Microsoft’s Project Origami appeared in 2006. First shown in a concept video, these mobile devices took the best of the then-current Tablet PC features and brought them to the small screen of a portable, pocket-sized computer. Application shortcuts were large enough to tap with a finger, users could write on the resistive screen without a special digital pen and the devices were small enough to take everywhere. Early use cases focused on everyday mobile computing activities like email, browsing, calendar functions and photo sharing.

However, what looked great in concept didn’t equate well in reality, and these UMPCs — Ultra-Mobile Personal Computers  — didn’t fare well. I personally bought three of these devices, and while I enjoyed using them as a mobile office, each highlighted the same huge user interface failure — Microsoft had simply shoved a desktop UI into a mobile device. The operating system wasn’t designed with a touchscreen in mind, and, as a result, it felt more like a traditional desktop with some touch-enhanced controls to make navigation easier. Microsoft has integrated touch support into Windows 7, but a desktop operating system with that feature is still limiting; its environment was created for use with a mouse and keyboard — not poised to reap the benefits of today’s touchscreen revolution.

Fast-forward to the little slates of today and what do you see? Apple handhelds with a user interface that is designed around the touchscreen concept, as opposed to an afterthought. Android, and even recent iterations of Microsoft’s own Windows Mobile, take the same approach — in order to build a successful mobile touch tablet, you have to start with touch in mind and proceed from there. I’ve come to realize this in my own experiments with desktop computing and mobile devices. I successfully installed Apple’s Mac OS X on a seven-inch touchscreen UMPC, but gave up using it because the interface wasn’t touch-friendly, and the UI felt forced on a smaller display. Cramming a power-hungry desktop computing interface into a mobile device simply isn’t effective, yet Microsoft has taken this path time and again.

Understanding mobility: battery life

Dovetailing with the year of the tablet is the rise of the ARM platform, which currently powers most of today’s smartphones. Paired with a mobile operating system designed for low-powered devices, ARM chips offer enough horsepower to run light apps and the mobile web for over a day on a single charge.

That’s the paradigm shift that is powering the rise of tablets today — handheld slates don’t require desktop-like performance, nor do they need support for desktop applications. By sticking with the traditional WinTel approach — a Windows computer powered by Intel silicon — battery life on the original UMPC units was a measly 2-3 hours — far too short for a mobile device. Hardware makers are jumping on the tablet train, but very few are incorporating either Microsoft’s technology or x86 processing power into their products.

The rising app economy paired with the maturity of ARM’s power-efficient platform makes for a perfect mobile device storm. Vendors know this, so they’re opting for a touch-friendly mobile platform like Android in their tablets, which are powered by smartphone guts from Nvidia, Marvell, Samsung, TI and Qualcomm. The equation for success isn’t guaranteed, but it’s a now-common approach — pair a truly mobile user interface with battery-friendly CPU architecture so the device can run all day long.

How can Microsoft make a comeback?

Microsoft can and surely will continue down its “old school” Tablet PC approach because it has invested time and effort to integrate touch and inking within Windows 7. The original vision of that 2001 Tablet PC as a digital journal still attracts fans, and it also has a place in the business world. But smaller slates are taking the consumer space by storm. If Microsoft wants a piece of the pie, here’s what has to happen:

  • Windows Phone 7 Series must redefine Microsoft’s smartphone efforts. Although we’ve only seen a few glimpses of Windows Phone 7 devices, it’s clear that Microsoft is making a clean break from the Windows Mobile interface of old. The current Windows Mobile platform simply isn’t 100-percent touch-friendly. Dig too far into its native menus or configuration screens and you’ll be reaching for a stylus. Microsoft must eliminate the need for a stylus with its Windows Phone 7 platform — fingertip control throughout the entire environment will help bring Microsoft on par with competitors like Palm, Apple and Google.
  • The Courier concept device must become a reality. Many are excited by the recent concept videos showing off Microsoft’s Courier project, and rightly so. The dual-display device looks to be five inches by seven inches when closed; it offers multi-touch, inking, object snipping and manipulation, and a truly touch-friendly interface designed to get out of your way when working. But let’s not forget that the UMPCs derived from the Project Origami concepts fell far short of nirvana. Microsoft can’t afford a repeat offense. Without official announcements or information, I can only speculate, but I suspect that Courier will come closer to success than the UMPCs, not only due to its mobile interface and underpinnings, but also because the device is expected to run on hardware similar to Microsoft’s Zune HD, which uses a powerful but energy-efficient ARM processor from Nvidia.
  • Market desktop tablets separate from mobile tablets — but use the Tablet PC history as an advantage. Why not leverage nearly 10 years of tablet development when raising consumer awareness of current offerings? Microsoft doesn’t have to label the iPad a “me too” product, but it should make consumers aware of its experience in this space. The benefits could extend beyond today’s slate devices and cause consumers to take a second look at traditional Tablet PCs.
  • Build its mobile tablets in house. Among the more recent successes Microsoft has enjoyed are products in which the company assembles all of the pieces itself. The Xbox platform is a prime example, and the Zune player, with its Zune Pass subscription service, earns respect from many. Why repeat the failure of the UMPC by allowing others to create the vision with Microsoft’s operating system? A good company provides the building blocks for a successful device. A great company integrates the hardware and software like no third party can, simply because those outsiders weren’t part of the original vision-building activities. Microsoft should take its Courier concept — and any other consumer tablet designs — and fully orchestrate the device creation. The Windows Phone 7 Series is an exception, but even here Microsoft is exerting some control by specifying the required hardware in approved chassis designs.
  • Create a finger-friendly shell for Windows 7 that completely hides the mouse and keyboard interface. Microsoft’s collaborative effort with HP on the Slate arrives later this year for consumers. Early videos show that the device will run Windows 7, so it’s likely too late to create a new operating system from scratch. Instead, Microsoft should build an interface for the Slate that hides the traditional Windows 7 desktop, dialogs and controls from users unless they specifically choose to enable them. Microsoft tried this very approach with two versions of its Origami Experience for UMPCs, but the shell was limited to certain activities, like media playback, photo viewing and the web. This time around, those limitations should be removed so that all of the benefits of Windows 7 are at your fingertips.
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  1. Great piece. You ask why we have not experienced the year of the tablet yet. In addition to hardware / form factor considerations though, I think the app / web app model has made a big difference.

    PC-optimized Windows, clearly, isn’t the right OS for a tablet. But if someone made a touchscreen tablet (until now) that didn’t run the variety of available Windows-based applications, what would you do with it? Apple’s app ecosystem, as well as the growing popularity of browser based software, has made the tablet form factor immediately useful.

  2. James Kendrick Tuesday, March 23, 2010

    I’m still not sure if the Courier, exciting as it seems, will be a real product. Primarily I go by the fact that MS does not sell computers, so I don’t know why they would produce and sell this one. They could handle it as a reference design, but that approach is what largely failed with the Origami attempt. The hardware partners went their own way as it was their product and their bottom line. MS has an entire ecosystem to protect, and selling computers would surely rock that boat by competing with customers.

    1. Definitely a good point about Microsoft making their own hardware and upsetting partners. But they’ve done it in the past and have been fairly successful. Plus, the Zune approach had the same potential with Plays For Sure partners, but Microsoft forged ahead and is still around in that market — most of the Plays For Sure folks aren’t.

      It also could be time for an immense change for Microsoft and their ecosystem — perhaps they should own it and this would be a small step in that direction. The amount of control their beginning to exercise in the Windows Phone 7 space is a sign that they might be ready for this change.

  3. A realistic assessment of the risk facing MS would require we make the assumptions explicit, to make the risk concrete:
    * It would take over a year to go from Flash animation to shipping hardware
    * This mess of new gestures should be integrated into an OS that has none and the result must still be usable
    * The disadvantages of the clam shell design (e.g., 50% ‘vertical’ movies) should become explicit in some role playing
    * The integrity of the concept would have to make it through an indisciplined crowd of manufacturers that are experts only at increasing margins and differentiating for three weeks until the next release (how many buttons do you want?)
    * This stuff would have to work. No, what you see is not “working”

    In one year, there will be several form factors for the iPad. There will be applications that mimic this demo… and improve on it. Customers will already use the device from the company they have learned to associate with sexiness. The 140,000 apps, evolving into their own Gen 2, will become something entirely new, enabled by more pixels and different modalities of use.

    In the meanwhile, will I be waiting for the Courier? No way

  4. This whole conversation reads as if the tablet market is already in the billions with Microsoft missing the boat. As it stands, “winning back” seems a little premature… what is that based off of? The iPad preorder numbers? Or is there another tablet that’s “won” that we’re talking about?

    I guess that I’m not convinced that this middle ground (between phone and PC) is as attractive as we’re all assuming. It’s a “nice to have” category. Meaning, people will buy these in addition to computers and phones, not instead of (unless I’m missing something). And those two categories will determine the war, while the tablet situation feels like a small battle…

    1. Bob, Microsoft essentially created the tablet market in 2001, although not in earnest until 2004. You’re right that up to now, the market hasn’t been in the billions. But it’s about to be as the form factor and use cases are re-defined by iPads, MIDs and other similar devices. And I understand if you’re not sold on the middle ground market — but as a content creator for mobile tech enthusiasts for the past several years, I can tell you that many are.

      Here’s the thing — Microsoft’s Origami Project attempted to do in 2006 with UMPCs what many others are doing now with ARM-based slates. But by all accounts and measures, the UMPC failed. The best selling devices — made by Samsung — have sales estimates of a few hundred thousand devices over three years. While iPad pre-orders are guestimates at the moment, I have no doubt that by the end of this year, Apple will have sold more iPads than all other UMPC tablets combined over the past three years.

      You’re right in that the war isn’t over, but after creating this space, Microsoft has essentially lost every battle in the war so far. The lone exception is is niche or vertical markets — from a consumer standpoint, it hasn’t been pretty. But I’m open to see evidence proving otherwise, so I’m happy to continue this conversation! :)

      1. Kevin, while you’re probably right in your assessments, I guess my main point was that they are future thinking. What you call out as a “lone exception” seems like the only example of anyone winning yet. Anything related to Apple is based on the assumption (allbeit a good one) of things to come and less on any past or current tablet wins.

        And I’d disagree that Microsoft has essentially lost every battle in the war so far… but that could because we’re talking about different wars. :-) I view “the war” as referring to OS-base on hardware devices including the three categories of desktop, mobile, and now tablet. Microsoft is still very much winning the war even if the battles of mobile and tablet are still up for debate. The tides could turn overall (some argue they already have, I suppose), but Microsoft is still the reigning champion for now at the aggregate level.

      2. Bob, I think your observation that we’re talking about a different “war” going on. As such, we can both be correct. ;)

        But I’d offer that I’m not assuming a “win” for Apple in this space based on current tablet efforts. As I mentioned in the piece, “tablet” means different things to different people. From a pure Tablet PC space, Microsoft owns the market, but they’re the only one in it with a desktop OS on slates and convertibles. And that market is largely niche and vertical demand.

        In the consumer space, a slate tablet can be a MID — like the iPod Touch or the iPhone, which is an iPod with voice. If you agree with my definition — and I understand if you don’t — Apple has already proven a huge win in the consumer slate / tablet / MID market.

        Stepping back to your definition of the war as OS-base on desktop, mobile and tablet. No argument that Windows is the current king on a desktop. But mobile and tablet? I don’t see it. Windows Mobile / Windows CE devices have been losing share consistently for several years to the likes of Apple, RIM, and Google. That could change with Windows Phone 7, but we’ll have to see. And again on tablet? Microsoft has tried with UMPCs and failed — the only win in this space is again niche and vertical. So even if I accept your definition of the war, I don’t see Microsoft as the overall victor — at least, not yet.

        Regardless of our definitions — I’m thrilled to simply see mainstream awareness of tablets. I’ve been waiting for years to see that happen, so it’s exciting to see everyone else “catch up.” I’m tired of being a niche outlier. ;)

  5. Great piece. Agree with your Zune comment. I think tablets will need the same kind of processing power to deliver the experience users are expecting: 1080p HD playback, Flash support and console level 3D gaming. NVIDIA Tegra delivers all of these without the penalty of trying to do this on the CPU.

  6. Kevin C. Tofel Monday, March 15, 2010

    Om, you won’t hear me argue with your points. Microsoft failed to evolve the UI and OS as the hardware evolved these past few years. As Pedro alluded, Courier could be a good start. And although I don’t think it’s “the” answer to Microsoft’s tablet problem, the company could leverage Windows Phone 7 / Windows CE 6 under-pinnings for the brand new environment you mention.

  7. Kevin C. Tofel Monday, March 15, 2010

    Pedro, the Courier concept looks to me like the first non-UMPC Microosft tablet that has a chance. The approach is almost Apple-esque in that the device may not do many things, but for the key use cases, it can be stellar. Utility and battery life are key, as you say. Although I used the heck out of my 3 UMPCs, they all fell short in both areas.

  8. Pedro and Kevin

    It is clear that in order for Microsoft to make a comeback in the Tablet market, it needs to rethink its approach to Tablets. The company needs to forget its main OS, Windows and think of developing a brand new environment for tabs that works with its existing platforms.

    Microsoft has innovator’s dilemma and unless it takes some chances it will be hampered by its legacy. It is a company built for the pre-Internet age and that indeed is its biggest problem.

  9. Pedro Hernandez Monday, March 15, 2010

    +1 on Courier

    Any device that falls short will be an unmitigated letdown like Origami/UMPC. Like you mentioned, there’s an encouraging shift toward mobile chips versus versus the hardware it would take to power the early Win7-based mock-ups. Some may argue that the concept has devolved — — but it looks like they’re on the right track for a device that balances utility and battery life.

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