Isn't Microsoft Supposed to Be Good at This?

Tomorrow, software giant Microsoft (NASDAQ: MSFT) launches Windows 8, the single biggest product launch in years, which is tasked with reinvigorating sluggish PC sales and growth for all the companies that rely on the PC market. On top of that, it will mark one of the biggest moves that Microsoft has made over the past 40 years into consumer hardware, with the launch of its Surface RT tablet.

Microsoft doesn't have a solid track record when it comes to first-party hardware, primarily selling keyboards and mice. The Zune and Kin were both poster children of Microsoft's hardware ineptitude. The Kin got axed a mere two months after launch. Even the Xbox, which is currently the top-selling game console in the U.S., could be considered a financial failure when you consider how many billions of dollars the entertainment and devices division has cumulatively lost over the years.

The Surface is boldly standing up to Apple's (NASDAQ: AAPL) iPad, directly challenging it in pricing. Microsoft has a lot riding on its new tablet. Will Surface succeed?

Survey says
Ahead of the launch, various members of the tech media have received units and reviews have begun to show up, giving consumers an educated opinion of whether or not the device is worth their hard-earned dollars. Remember, this is the Surface RT version that runs on an NVIDIA (NASDAQ: NVDA) Tegra 3 -- the ones running Intel (NASDAQ: INTC) chips will follow later. Fellow Fool Eric Bleeker even thinks NVIDIA might be one of Surface's biggest losers, since the tablet's high price may not translate into meaningful unit sales that would have otherwise benefited the graphics specialist.

Let's see what the professional geeks think:

  • The Verge: " The whole thing is honestly perplexing. If this device is not as good as (or better than) the best tablet, and not a complete alternative to a laptop -- who is this for? What is it supposed to be?"

  • Engadget: "... of the content consumption and entertainment, where the Surface is currently lacking. It needs a bigger pile of apps and games to make up for that and, while we're sure they're coming, we don't know when."

  • ABC News: "The Surface is full of potential, but until its software performance and apps are as strong as its hardware, I, unfortunately, will still drag both a laptop and an iPad through [TSA] security."

  • The New York Times: "So that's the amazing, amazing hardware. Now the heartbreak: software."

It would seem that the consensus is that Microsoft absolutely nailed it on the hardware side of the equation of building an integrated device. Earlier this year, The New York Timestold the story of how Microsoft execs were flabbergasted at the lengths that Apple went to in order to set its hardware apart from the competition. The iPad is built using high-grade aluminum from Australia, with Apple naturally locking down copious quantities of the material.

That spurred the software company to begin searching for its own unique materials to build the Surface tablet, and they landed on magnesium. Microsoft is calling it VaporMg, which gives the Surface a unique look and feel. This is high-quality stuff, and a testament to how serious Microsoft is taking the hardware.

A soft Surface
Unfortunately, the software side of Surface seems to be the device's weakest link. The Verge noted, "Nearly every app I tried crashed completely at least once while I was testing the tablet, third and first-party." The New York Times' widely followed David Pogue even titled his review, "Sleek Tablet, but Clumsy Software."

It seems that the true irony that Surface embodies is that a software giant just made a device with integrated hardware and software, but the software is far worse than the hardware. Maybe these are the bugs that Intel CEO Paul Otellini was reportedly referring to.

Doing the job halfway simply won't be enough, especially when Surface RT is tasked with directly challenging the iPad, which has solid hardware and software. Shouldn't Microsoft be good at software by now?

It's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In this brand-new premium report on Microsoft, our analyst explains that while the opportunity is huge, the challenges are many. He's also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

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Evan Niu, CFA, owns shares of Apple. The Motley Fool owns shares of Apple, Intel, and Microsoft. Motley Fool newsletter services recommend Apple, Intel, Microsoft, and NVIDIA. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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