How Microsoft can fix the Surface tablet the second time around

Microsoft insists on selling us its Surface laptop/tablet hybrid, but it needs to take user preference into account.

With the announcement of the second version of Microsoft’s Surface tablet coming up later this month in New York City, this might be a good time to ask a pertinent question: What’s really important in a hybrid tablet?

Hybrid devices like the Surface and Surface Pro, the HP Split 13 x2, the Lenovo IdeaPad Yoga 11s, along with many others, fall somewhere between a classic iPad-style tablet and an Ultrabook-style laptop like the Macbook Air or Sony Vaio T Series. They are designed to work as both standalone tablets and keyboard-equipped laptops. The idea is that one device can take the place of both, saving money and the hassle of carrying and switching between multiple devices.

The Problem With Hybrids
It’s a nice theory, but the devices haven’t really caught on yet, and I’m pretty sure I know why.

The problem, as I see it, is that most of these hybrid devices are trying to too hard to do it all, and that’s pretty hard to pull off. Hybrid makers would do better to concentrate on one aspect of the device, and then make the other capability a nice add-on for extra functionality.

But here’s the kicker: The laptop, not the tablet, needs to be the core of this combo.

I’ve used many of these devices, including the Surface and Surface Pro and the HP Envy x2, as well as touchscreen "laptops" like Google's Pixel Chromebook. They’re all interesting devices, but none of them is perfect. Working through each one’s compromises, though, made it abundantly clear that for the device to have a chance of replacing a separate laptop and tablet, it had to ace the laptop portion of the test.

A hybrid with a strong laptop function that also works as a mediocre tablet could still find a home in many business users’ kits. After all, having a second-rate tablet at hand is often better than not having a tablet at all.

But if the device can’t cut it as a laptop, all bets are off. What good is a hybrid laptop/tablet if you still have to lug along your laptop to do your real work?

A Tale of Two Surfaces
The differences between the two existing Surface models make the point obvious. The Surface is lighter and enjoys longer battery life than the Surface Pro, but its Quad-core NVIDIA Tegra 3 chip is underpowered for a laptop. Worse, relying on Windows RT means it may not run all the Windows programs a laptop would. It simply won’t replace a laptop for anyone who really needs one.

The Surface Pro, while bigger, heavier, more power-hungry and much more expensive, sports an Intel Core i5 chip like those in many traditional laptops. If you can live with its relatively small screen and those snap-on keyboards (I could), then it might actually be able to replace a standard laptop for you. And it’s still usable as tablet. Sort of, anyway.

And that’s what these hybrids are all about: Replacing what you absolutely need to have, and doing a good-enough job at the add-ons that would be nice to have. Or, that’s at least what they should be doing. Let’s hope the upcoming Surface 2 and Surface 2 Pro do a decent job.

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Windows 8 Update: Microsoft sacks iPad in Windows 8 ad, join forces with NFL

About those lofty Windows Store app numbers…

A new ad from Microsoft mocks iPads by comparing them – unfavorably – to tablets running Windows 8, which receive live updates on their Start screens, run office apps, display two apps at a time and support Microsoft Office applications – things iPads don't do.

The ad has the hapless iPad acknowledging a string of things it can’t do until it finally asks (in the voice of iPad’s Siri interface) “Should we just play ‘Chopsticks’?”

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The ad hearkens back to an earlier iPad Mini ad in which a “Chopsticks” duet is played on both an iPad and and IPad mini.

The ad wraps up with a display of the price of an iPad ($699) and the price of a 64G Asus Vivo Tab Smart ($449) the message being that for $250 less, you can get a machine that does more.

It’s interesting that the ad doesn’t use the comparable $899 Surface Pro tablet made by Microsoft as a reference.

Low usage of Windows Store apps

Microsoft says it has more than 65,000 apps in its Windows Store inventory that are designed specifically for use on Windows 8 machines. The catch is that they don’t get used that often, according to a report by Soluto, a Web-based PC-management service provider.

Based on data gathered from 10,848 Windows 8 devices, Soluto found that users were more likely to fire up Windows Store apps if they were working on a tablet or touchscreen laptop than if they were working on a desktop or non-touch laptop (see graphic).
Windows 8

How many times a day will a Windows 8 user launch a Metro App?

Soluto hasn’t crunched the data yet about how often non-Windows Store (Metro) apps are launched, but suspects it is significantly higher, says Roee Adler, chief product officer for Soluto.

What were those apps? The most used was Yahoo! Mail, which was launched on average 26.91 times per week, followed by Social Jogger (25.98), Social Networks (21.19) and Lync MX (9.98).

Most users of desktops, laptops and touchscreen laptops didn’t average launching a Windows Store app even once per day, and 44.38% of tablet users fell into the same category.

What does Soluto make of this? “There’s a consensus in the market that Windows 7 was a good, solid operating system, and it’s unclear why the change to Windows 8 was needed for those who are happy with Windows 7,” the report says. “If you’re pragmatic about using the Windows operating system with a keyboard and mouse - there’s no rush. Wait and see what “Windows Blue” has in store for us before you upgrade.”

Look for Surface tablets on NFL sidelines

Rather than stalking up and down the sidelines referring to laminated play charts NFL coaches may soon use Microsoft Surface tablets.
Microsoft has signed a five-year, contract to pay the NFL $400 million to improve interactive features between football viewing and its new Xbox device. After that, the deal is expected to place Surface tablets in the hands of coaches, according to a story by the Associated Press.

For Microsoft this will primarily serve as a TV showcase for its technology and serve as a kind of advertising for the devices. Microsoft has already engaged Surface product placement, most notably in an episode of the ABC siticom show “Suburgatory” in which the device was actually written into the script as a love interest for the main character.

Microsoft will also place its branding on referees’ instant-replay devices and other areas along the sidelines, the AP says.

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Microsoft brings the Live Tile experience to SkyDrive

Windows 8's new Start screen evokes many emotions from customers, with most falling on either the love or hate side with almost no middle ground. However, one thing that can be agreed on is that the screen has no shortage of information. Users are bombarded with messages from Facebook, email, weather and countless other endlessly updating tiles. Now Microsoft has added one more to the perhaps overloaded mix.

Today the company announced it is pushing an update to the SkyDrive app for Windows 8 that will bring the live tile features to the cloud storage and sharing platform.

In an announcement earlier today Microsoft's Mike Torres outlined the new feature. "The SkyDrive app from the Windows Store will start showing you notifications on the live tile when you add new files to your SkyDrive". In other words, this should not be a constantly flickering icon that will be in your face. Torres went on to explain that "whenever you add new files to SkyDrive, the app tile shows you relevant details. If you add a document, you’ll see the document name, along with when it was added, and what folder it’s in. If you add photos, the tile gives you a nice view of those photos".

I honestly like live tiles. When I walk away from my computer I switch to the Start screen so that when I return, or even pass by, I see relevant information. Its easier than clicking on different tabs. I also realize that I very well may be part of a minority in saying that.

As for the update, it is promised to be rolling out today -- apparently on a gradual basis, so don't panic if you don't have it yet. I don't either. Hopefully soon.

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Microsoft revenue up, aided by Windows unit sales, though profit declines

The results are the first to include Windows 8

Microsoft reported a drop in profit for the second quarter of its fiscal year, though revenue increased, thanks partly to a 24 percent jump in sales from its Windows division.

Microsoft's revenue increased 2.7 percent to US$21.46 billion in the quarter, which ended Dec. 31.

Net income shrunk to $6.38 billion, or $0.76 per share, from $6.62 billion, or $0.78 per share, in Microsoft's second fiscal quarter of 2011, the company said on Thursday.

CEO Steve Ballmer said in a statement that Microsoft's "big, bold ambition to reimagine Windows," along with other initiatives like its Surface tablet and the new Windows Phone 8, are paying off.

The Windows division generated revenue of $5.88 billion, up 24 percent year on year. However, on a pro forma basis revenue was up only 11 percent, when factoring in a net deferral of revenue for the Windows Upgrade Offer and the recognition of previously deferred revenue from Windows 8 pre-sales.

The Server & Tools business, which includes products like SQL Server and System Center, posted revenue growth of 9 percent to $5.19 billion. System Center revenue was up 18 percent, while SQL Server revenue climbed 16 percent.

The Business Division, which includes the Office suite, reported $5.69 billion in revenue, down 10 percent. Adjusted for the impact of the Office Upgrade Offer and pre-sales, pro-forma revenue rose 3 percent. Revenue from server software including Lync, SharePoint and Exchange hit "double-digit percentage growth." Microsoft is expected to ship a new version of the Office suite this quarter.

The Entertainment and Devices Division, which includes the Xbox products, saw revenue decline 11 percent to $3.77 billion. Microsoft sold 5.9 million Xbox consoles in the quarter, down 28 percent, while its Skype business, also part of this division, saw a 59 percent increase in call minutes.

The Online Services Division, which includes online advertising generated by Web properties like the Bing search engine, increased its revenue 11 percent to $869 million.

Overall, Microsoft said that its pro-forma revenue was $22 billion, when adjusted in part to reflect revenue deferrals for several Windows, Office and video game offers, as well as pre-sales.

In a conference call to discuss the results, CFO Peter Klein called the numbers "solid," and said Microsoft is building momentum behind Windows 8 and Windows Phone 8, and behind upcoming releases like Office 2013 and its Surface Pro tablet.

Microsoft also experienced "strong growth" in multi-year licensing revenue, he said, exceeding 15 percent year on year, a sign that enterprise customers are making long-term bets on the company.

Windows 8 sports a radically redesigned user interface based on tile icons that is optimized for touchscreens found primarily in tablets but also in newer "hybrid" laptops and some desktop PCs, like all-in-one systems.

The new OS started shipping in October, and Microsoft has said it is satisfied with the product's sales, a message that is at odds with skeptical views from market researchers like NPD Group and IDC, as well as financial analysts from Morgan Stanley.

In November and again in January, Microsoft said that Windows 8 shipments were "roughly" in line with Windows 7 shipments at the same stage of the sales cycle three years prior.

However, NPD Group declared in late November that Windows 8 had failed to give the consumer Windows PC and tablet market enough of a boost, and that in the first four weeks after its launch Windows device sales fell 21 percent year on year.

Later in early January, NPD Group said that Windows 8 "did little to boost holiday sales or improve the year-long Windows notebook sales decline."

About a week later, Morgan Stanley financial analysts downgraded the firm's recommendation on Microsoft's stock from Overweight -- the equivalent of "buy" -- to Equal Weight, the equivalent of "hold," citing concerns over Windows 8 sales and over the PC market dynamics.

Meanwhile, IDC reported that worldwide PC shipments fell 6.4 percent to 89.8 million units in the fourth quarter of 2012, year on year, a steeper decline than the 4.4 percent IDC had anticipated. A big part of the problem was that Windows 8 failed to jump-start sales, IDC said.

Even while expressing satisfaction with Windows 8 sales, Tami Reller, CFO and chief marketing officer of the Windows Division, acknowledged in January that OEM partners hadn't made enough Windows 8 touch devices to meet the high demand for that type of computer.

"Frankly, the supply was too short," she said then at an event held at the CES show in Las Vegas where she answered questions from a JP Morgan analyst.

"There was some misalignment between where products were distributed and where the demand was," she added.

Some tablets running Windows RT -- the Windows 8 version for ARM chips -- didn't get the type of distribution that would have been "ideal," she said.

Microsoft's CFO reiterated these points Thursday, saying Microsoft is working with its chip and OEM partners to fine-tune the availability of Windows 8 devices to make sure there is the right mix of price points and configurations.

A similar effort is under way with developers to increase the variety and volume of Windows 8 applications. And Microsoft is taking steps to expand the distribution of its Surface tablets.

Its early days," Klein said. "An ambitious endeavor like this takes time.

Microsoft has sold more than 60 million Windows 8 licenses, he said, repeating what Reller had said earlier this month. At the same time, Windows 7 deployments continue, and it is now on more than 60 percent of enterprise desktops worldwide, according to Klein.

Microsoft is counting on Windows 8 to help improve the operating system's minuscule share in the white-hot tablet OS market, where it lags significantly behind iOS and Android. Meanwhile, the PC market, where Windows has historically been the dominant OS, is shrinking.

Last year, Gartner forecast that worldwide media tablet sales to end users would total 119 million units in 2012, up 98 percent compared with 2011, and that Apple's iOS would continue its dominance with a projected share of over 61 percent. Windows tablet shipments were expected to be only 4.8 million in 2012.

Microsoft has been offering Windows 8 Pro upgrades at discounted prices as low as $14.99, but prices will shoot up after Jan. 31 to $199.99.

One special offer lets people upgrade an existing Windows XP, Windows Vista or Windows 7 PC and lets them acquire Windows 8 Pro for $39.99 via Windows.com download or $69.99 from a retail store DVD. The other offer, priced at $14.99, is for consumers upgrading a new Windows 7 PC bought between June 2 of last year and Jan. 31 -- they have until Feb. 28 to register for the special upgrade price.

After Jan. 31, people will also be able to upgrade for the first time to the regular version of Windows 8 for $119.99.

Windows 8 Pro is more advanced than Windows 8 in areas like security, networking, virtualization and remote desktop access.

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Why I abandoned Windows Phone 8

I recently acquired a Nokia Lumia 920 to experiment with Windows Phone 8. But a few weeks in, I'm already back to my Android-based device.

A few months ago, I forced myself to switch to Windows 8 on my desktop system (and laptop) and ended up liking the operating system very much. Once I got used to the quirks and garish look of the new Start screen and learned many of the shortcuts built into Windows 8, I found myself enjoying the operating system and was more than pleased by its myriad of enhancements and performance improvements.

I initially made the switch to Windows 8 because I wanted to fully immerse myself into the OS before formulating any strong opinions. Considering how much I ended up liking Windows 8 on my desktop, I thought I would conduct a similar experiment with my smartphone. For the last few years, I have been deeply entrenched in the Android ecosystem and have experience with a multitude of devices. I enjoy installing custom ROMs on the devices and have experimented with countless apps and utilities. At this point my smartphone is an integral part of my day-to-day computing, and I’ve grown fond of a handful of apps and the convenience of always having my inboxes and access to the web in my pocket.

I picked up a [Windows Phone 8-based Nokia Lumia 920 and was initially impressed. The hardware itself is excellent. The Lumia 920’s camera is top notch. The device is obviously well-built. The screen looks great, and navigating through Windows Phone 8 was smooth as silk. At first, my Android-based device (currently a Samsung Galaxy Note II) remained my daily driver. I kept the Lumia 920 handy until I felt I was comfortable using its email client, browsing the web. But eventually I customized the Start screen to my liking and got a good feel for what Microsoft and Nokia were trying to accomplish with the phone. I installed only a couple of apps and got comfortable with them too.

After a couple of weeks and a good initial impression, I decided to dive in head-first and make the Lumia 920 my daily device. At first, I was happy with the decision. I dug the Live Tiles and the Lumia 920 never lost its luster; it’s a great phone.

But as I started to install more and more apps and dig deeper into the Windows Phone App Store, I was regularly disappointed. There seemed to be three kinds of apps available for Windows Phone 8:

Apps specifically designed for the OS that showed signs of greatness
Quick-and-dirty ports of apps obviously designed for other platforms
Kludges that were nothing more than wrappers for mobile websites

The apps designed with Windows Phone 8 in mind were mostly great. I especially liked the IMDB app, which blows away its counterparts on other mobile platforms. The Facebook app was also very fast and responsive, but it wastes a TON of screen real estate with larger-than-necessary fonts in the navigation menu and wasted white space in the feed. There were times when I could only see a single post in my news feed because of all the wasted screen real estate. I’m not sure what the app developers were thinking with that one.

Then there were the obvious ports that just didn’t look right on Windows Phone 8. One in particular, Words with Friends, comes to mind. I know it’s an older title and games aren’t a necessity, but I enjoy playing Words with Friends; it’s a nice break in the day. Anyway, fonts (like the one used to display the score) were nearly illegible and the game is just plain broken. As of a couple of weeks ago, you couldn’t use words with the letter “Z” and the main screen wouldn’t update when it was your turn. You’d think with the amount of complaints logged in the app store someone at Microsoft would fix the game, but no such luck.

And then there’s apps like YouTube, which seem to be little more than wrappers for the YouTube mobile site. Minimal effort was put into optimizing the app for Windows Phone 8, and it shows.

As you probably guessed by now, my little experience was a failure. I’m back to my Android device and don’t plan to give Windows Phone 8 another try for a few months. If Microsoft wants people to give Windows Phone 8 serious consideration, they’ve got to get serious about offering quality apps for the platform. It’s not just about the number of available apps, it’s about the quality, and at this point in time Windows Phone 8 trails in both departments.

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