Acer Begins Competing Against Microsoft’s Surface Tablet - In The Press

Microsoft’s upcoming Surface tablet could be the first crack in the company’s Windows 8 world. Acer chief executive JT Wang told the Financial Times that the company will have to “think over” its commitment to Windows now that Microsoft plans to directly compete in the Windows hardware market.

“We have said [to Microsoft] think it over,” JT Wang, chief executive and chairman of Acer, told the Times. “Think twice. It will create a huge negative impact for the ecosystem and other brands may take a negative reaction. It is not something you are good at so please think twice.”

When Microsoft unveiled the Surface tablet in early June, most of the press and analysts in attendance were impressed with Microsoft’s attention to detail. The Surface felt well engineered, and its integration with Windows 8 could make it the world’s first tablet designed for business. By integrating with Windows 8, the Surface becomes a unified hardware-software ecosystem that’s essentially a miniature version of how Apple-does things, a united front of hardware and software.

Where Do Hardware Makers Fit In?

The problem is, of course, is that Microsoft’s unification of hardware and software into a single platform doesn’t leave much room for the company’s traditional hardware partners. This lack of breathing room means that makes of Windows 8 hardware will be forced to compete with me-too products or to branch out in other directions.

Microsoft alluded to this issue in its recent 8-K filing: “Our Surface devices will compete with products made by our OEM partners, which may affect their commitment to our platform,” it wrote.

Campbell Kan, Acer’s president for personal computer global operations, told the Financial Times that it is considering alternatives. “If Microsoft… is going to do hardware business, what should we do?” he asked. “Should we still rely on Microsoft, or should we find other alternatives?”

The problem is that companies like Acer and its rivals don’t really have many alternatives. Apple, of course, is a closed ecosystem. Only Apple can make Macs and iDevices.

Google’s Android would probably be an manufacturer’s best bet, but there are already a torrent of different devices using various versions of the Android operating system. And Android doesn’t really scale up into notebooks and desktops. Google’s Chrome operating system is supposed to handle that space, but it has yet to catch on. And Android has its own “Surface”-like problem, as hardware makers must compete with Google’s own Nexus 7 tablet, which also unifies hardware and software design.

What about Linux? While it may be a perfectly viable operating system for PCs and servers, nothing so far suggests that Linux will be a viable tablet OS - not even Spark, or “Vivaldi,” the first Linux tablet. Spark, at this point, is nothing more than a curiosity.

Windows Still the Best Option

Despite the Surface, Windows 8 still represents the best platform choice for hardware makers. For one thing, until Microsoft prices the new tablets, manufacturers can still hope that the Surface will turn out be a premium-priced, “aspirational” tablet rather than a direct competitor. (Microsoft has promised the Surface will be priced competitively, but that term is obviously open to interpretation.)

With all that in mind, what is going on with Wang’s contentious comments?

Spin. Positioning. Bluster. If Surface was really a bad tablet, Wang would be welcoming the it as “validation” of Acer’s own Windows 8 plans.

Wang and Acer may really be fighting for profit margins, via the press. If Wang can push Microsoft to slap a premium price on the Surface, value vendors like Acer will have room to maneuver under Microsoft’s price umbrella.

And it’s likely in Microsoft’s best interests to go along. Microsoft still relies on its partners, even if Windows 8 hardware makers may be feeling a bit paranoid these days.