Mi­crosoft’s IPad com­peti­tor faces long odds

The Pak Banker - - Company& -

SAN FRAN­CISCO: Mi­crosoft Corp. Chief Ex­ec­u­tive Of­fi­cer Steve Ballmer, said to un­veil new soft­ware for tablets at the Con­sumer Elec­tron­ics Show next week, will face skep­tics who say his com­pany won't soon nar­row Ap­ple Inc.'s iPad lead.

"By the time Mi­crosoft gets it fig­ured out ev­ery­body will al­ready own an iPad," said Keith God­dard, CEO of Cap­i­tal Ad­vi­sors Inc. an in­vest­ing firm in Tulsa, Ok­la­homa, that holds Ap­ple shares. "That train has left the sta­tion."

Mi­crosoft will an­nounce a full ver­sion of the Win­dows com­puter op­er­at­ing sys­tem that runs on ARM Hold­ings Plc technology at the show, which be­gins in Las Ve­gas on Jan. 6, two peo­ple fa­mil­iar with Mi­crosoft's plans said last week.

Al­ly­ing with ARM is Mi­crosoft's way of step­ping up ri­valry with Ap­ple, which has gar­nered the largest share of the tablet mar­ket with its iPad, a touch-screen de­vice in­tro­duced in April that han­dles video, mu­sic and com­put­ing tasks. The ef­fort may fal­ter un­less Ballmer can match the fea­tures con­sumers have come to ex­pect from the iPad, God­dard said.

The new Win­dows ver­sion would be tai­lored for bat­tery­pow­ered de­vices, such as tablets and wire­less hand­sets, the peo­ple said. Chips based on ARM technology are made by Qual­comm Inc., Texas In­stru­ments Inc. and Sam­sung Elec­tron­ics Co.

Frank Shaw, a spokesman for Red­mond, Wash­ing­ton­based Mi­crosoft, de­clined to com­ment, point­ing in­stead to re­marks by Ballmer in July.

"We're tun­ing Win­dows 7 to new slate hard­ware de­signs," Ballmer told an­a­lysts then. He also said, Ap­ple has "sold cer­tainly more than I'd like them to sell." Com­puter mak­ers have un­suc­cess­fully been try­ing to sell tablet-style com­put­ers based on Mi­crosoft's Win­dows for about a decade. Be­fore the iPad, tablets made up only about 2 per­cent of the PC mar­ket. Ap­ple, based in Cu­per­tino, Cal­i­for­nia, has sold 7.46 mil­lion iPads through Septem­ber. Ac­cord­ing to an­a­lysts at Gold­man Sachs Group Inc., it may sell as many at 37.2 mil­lion iPads next year.

That in­di­cates that the tablet com­puter's share of the PC mar­ket may rise to 9.2 per­cent next year, based on a pre­dic­tion by re­search firm IDC for 402.7 mil­lion PC ship­ments in 2011.

Mi­crosoft dropped 23 cents to $28.07 at 4 p.m. New York time in Nas­daq Stock Mar­ket trad­ing. The shares have de­clined 7.9 per­cent this year.

Be­sides gain­ing share, Ap­ple has also re­de­fined con­sumer ex­pec­ta­tions for what a tablet com­puter should do, says Michael Garten­berg, an an­a­lyst at Gart­ner Inc. In­stead of re­quir­ing the use of a sty­lus pen to serve as a com­puter mouse, the iPad al­lows peo­ple to nav­i­gate us­ing their fin­gers.

"Ap­ple did this year what no one had done in the pre­vi­ous 10 --crack that space be­tween the PC and the phone," said Garten­berg, who's based in New York. "Mi­crosoft has been work­ing very hard at putting a square peg in a round hole."

Still, an in­tro­duc­tion at CES gives Mi­crosoft a chance to win over some of the more than 100,000 peo­ple ex­pected to at­tend the premier technology trade show, he said.

"It's a won­der­ful op­por­tu­nity for Mi­crosoft and Ballmer to put a stake in the ground," said Garten­berg. "Now that Ap­ple cracked the mar­ket no one wants to get left be­hind."

By adapt­ing its com­puter op­er­at­ing sys­tem for a tablet, Mi­crosoft is tak­ing a dif­fer­ent ap­proach from Ap­ple, which used a mo­bile-phone op­er­at­ing sys­tem as the ba­sis for the iPad. Ap­ple's soft­ware en­ables in­stant startup, longer bat­tery life, and ac­cess to the more than 300,000 ap­pli­ca­tions al­ready de­vel­oped for the iPhone.

Mi­crosoft is tak­ing soft­ware de­signed for use with a mouse and key­board and adapt­ing it to a touch screen, ac­cord­ing to the peo­ple fa­mil­iar with the mat­ter. That will re­quire de­vel­op­ers to re­work PC pro­grams to make them use­ful on a tablet.

Chips based on ARM technology are used in most smart­phones, as well as Ap­ple's iPad. Still, they don't crunch num­bers and han­dle other com­put­ing tasks as quickly as In­tel Corp. chips, which run the ma­jor­ity of PCs. Load­ing a full ver­sion of Win­dows onto a tablet pow­ered by a chip de­signed for mo­bile phones may re­sult in an un­re­spon­sive or slow-mov­ing ma­chine, said Michael Cherry, an an­a­lyst at Di­rec­tions on Mi­crosoft, a Seat­tle-based re­search firm. -Bloomberg

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