Anyone remember the UMPC?

If the report is true — and I suspect it is — this won’t actually be the first time we’ll see 7-inch slates running Microsoft Windows. I know because I still have a few old UMPCs, or ultra mobile portable computers, from a half-dozen years ago. Microsoft didn’t make the devices, but worked with hardware vendors to improve touch support for the operating system. Tablets hit the market from vendors such as TabletKiosk, OQO, Acer, Samsung and Asus to name a few. In fact, the Asus model ended up spawning the Eee PC netbook and starting a whole new market.

These small slates were chunky, only ran for three or four hours on a charge, and used inefficient resistive touchscreens. But there was niche appeal to geeks like me that valued mobility. I actually used a Samsung model paired with a 3G phone and folding Bluetooth keyboard as my primary computing device for months. Long before the tablets of today, I was able to get work done anywhere and I didn’t have to tote a large laptop with me. Remember, this was long before the light and thin laptops we have today.

What was wrong with those small slates

While the solution worked for me, it had definite downsides, many of which Microsoft is now in a position to overcome. Look at Microsoft’s Surface hardware and you’ll see great design in a thin package. Capacitive touchscreens have replaced junky resistive options. And instead of dealing with Windows XP crammed into a screen size it isn’t meant for, Microsoft’s Windows 8 touch interface could be a joy to use on a 7-inch tablet.

That last point may be the most important because the idea behind UMPCs are much the same as the tablets of today: a touch-friendly portable computer with access to hundreds of thousands of software titles. Microsoft and its hardware partners couldn’t deliver on that promise back in 2006, however. Hardware limitations were part of the problem, but the bigger issue was one of user experience: the Windows of yesteryear simply wasn’t designed for a low-resolution small screen.

The new Windows could address much of what was wrong with UMPCs

The “modern” — or what used to be called Metro — interface can work on a 7-inch tablet, however. That’s evidenced by Windows Phone 8, which uses the same interface on smartphones that are even smaller.

And that makes me think that a small Surface tablet has much to do with the Windows Blue effort, which is meant to bring more unification to Windows 8 and Windows Phone 8. It’s even possible that Microsoft will opt to use Windows Phone 8 for a small slate, given that it will support 1080p resolution screens in the future. That’s an outside chance, though: I’d expect the Surface RT software on a 7-inch tablet.

What took you so long, Microsoft?

If Microsoft does create a 7-inch Surface, I’ll surely be interested; after all, I’m a fan of the UMPC concept as well as an early evangelist for the 7-inch slate size. But it’s disappointing that Microsoft is only just now realizing what some of us did in 2010: there’s a potentially big market for small slates. Again, from the WSJ report:

” … 7-inch tablets weren’t part of the company’s strategy last year, but Microsoft executives realized they needed a response to the rapidly growing popularity of smaller tablets like Google Inc.’s 7-inch Nexus, which was announced last summer, and the 7.9-inch iPad Mini introduced by Apple Inc. last October.”

Microsoft had the right idea with UMPCs, but it didn’t tweak the user interface enough. Sure, the devices were expensive and built with typical PC hardware, not components optimized for tablets. That barrier is long gone now, though. Had Microsoft put some serious effort into its new touch interface in a small form factor Surface sooner, the tablet market — and maybe even the PC market — might look different today.

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On Thursday, Goldman Sachs downgraded Microsoft shares to “Sell” from “Neutral” and Nomura Securities cut its call to “Neutral” from “Buy.” The moves came a day after  IDC called the first quarter of 2013 “the worst quarter” ever, with PC sales down 14 percent from the year-ago quarter. (Gartner numbers were slightly better: it had PC sales only off 11.4 percent year over year for the quarter.)

“At this point, unfortunately, it seems clear that the Windows 8 launch not only didn’t provide a positive boost to the PC market, but appears to have slowed the market,”  Bob O’Donnell, IDC Program Vice President, Clients and Displays said in a statement. (Full IDC statement here.)

Long-time Microsoft watcher Rick Sherlund at Nomura Securities wrote that the combination of “sluggish” Windows 8 adoption and the “lack of compelling new hardware is disappointing with no relief likely” until later this year when Intel releases the new Haswell notebook processor.

As if on cue, the Wall Street Journal (subscription required) reported that Microsoft plans a new 7-inch Surface tablet to come later this year.

Updated: To be fair, for the first quarter, IDC also acknowledged that industry darling Apple also faded. While it did better than the overall U.S. market, IDC said shipments of Apple PCs  slipped 7.5 percent — apparently because more people are opting for iPad tablets as PC replacements.

MSFT data by YCharts

This story was updated at 6:54 a.m. PST with Apple PC share decline.

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When Microsoft first hinted at Surface Pro pricing, it said it would be competitive with Ultrabook pricing. While the $899 starting price is more than some would like to see, I’d say it’s roughly in line with previous expectations, even with additional costs for a keyboard cover. I’ve seen a few Ultrabooks in the $600 to $800 price range, but they’re generally entry-level devices in this class. Most are actually nearer to over just over $1,000.

Microsoft is using Intel’s Core i5 chip to drive Windows 8 on the 10.6 ClearType display. On paper, that screen should be as good, if not better than most Ultrabooks because of the 1920 x 1080 resolution; that works out to a reasonable 208 pixels per inch. And the slate can output 2560 x 1440 resolution to an external display over Mini DisplayPort. Overall the device is built similarly to the Surface RT, with the same materials and integrated stand.

Price and specs aside, I think the most intriguing aspect will be the included Surface pen. Like the Galaxy Note 2 I use daily, Surface Pro has both a capacitive touchscreen and a digitizer for ink. Assuming the slate has good palm rejection technology, digital inking on the two-pound tablet may be the real secret sauce for success here. Of course, it doesn’t hurt that the slate can run any Windows 7 application, unlike the Surface RT, which is limited to apps that are new or are re-compiled to run on ARM-based chips.

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One of the biggest factors impacting design choices right now are the needed changes due to touch interfaces found on everything from phones and tablets to household appliances. “Touch is magical,” said Behar. “It doesn’t remove the notion of tactility, which is important to design. How does something feel or respond when you touch it, for example.” The touch experience brings us back to “finger painting” by making the user experience more personalized and intimate. Going forward, design will be impacted more and more by how you can affect the world with your hands.

So who’s doing design right? Behar called out Microsoft and Nokia for their modern, contemporary design approaches combined with products. “I’m not sure that Microsoft’s Surface will work out, but I like where Microsoft is going; they’re moving away form skeuomorphism and thinking more about touch,” said Behar. From a user experience and user interface perspective, both companies are making good progress. The UX and UI are connected to the experience in a way that makes the product appealing and useful.

While touch is a new device design aspect, so too are software upgrades. “Self-healing is now part of design thanks to firmware that improve physical aspects of a device. The Jambox speaker, for example, has been made louder due to a software upgrade.” I’ve seen this first-hand as new features have been added to the Nest thermostat that add functionality without requiring a physical design change.

So what’s the hardest thing to design? “Wearables,” according to Behar. “I see lots of glowing Apple logos here in the crowd on the back of laptops. You can’t have wearables with such flashing things.” Indeed, Behar points to eyeglasses as a good example of design: Once wearing them, they almost become invisible to the wearer, bringing only needed functionality.

Check out the rest of our RoadMap 2012 live coverage here, and a video recording of the session follows below:

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Microsoft gets a lot of good marks for its hardware, which includes a keyboard cover and kickstand, though many question the usability of Surface when placed on a lap. But the bigger questions revolve around the Windows RT software, which is buggy and limited and isn’t able to run old legacy Microsoft applications the way Windows 8 devices can. Surface Pro, which will run Windows 8, will debut in a few months and may get a better reception.

Here’s a look at some of the comments from reviewers:

“Look, here’s the thing. You’d have to be fairly coldblooded to keep your pulse down the first time you see the Surface: its beauty, its potential, its instant transformation from tablet to PC. How incredible that this bold, envelope-pushing design came from Microsoft, a company that for years produced only feeble imitations of other companies’ fresh ideas. And how ironic that what lets the Surface down is supposedly Microsoft’s specialty: software,” said David Pogue in the New York Times.

“For all Microsoft’s claims to hardware perfection and software revolution, Surface RT is undone by too many little annoyances, cracks, and flaws. After the initial delight of an evolved tablet wears off, you’ll groan—because Surface brings the appearance of unity, but it’s really just the worst of both worlds. Instead of trading in your laptop and tablet for Surface, a cocktail of compromises that fracture the whole endeavor, you’ll miss them both urgently,” wrote Sam Biddle in Gizmodo.

“The big problem Microsoft has is that right now it doesn’t matter how good Surface is. The decision on whether or not to buy depends not on Surface itself, but on Windows RT. The only third-party applications that will run on Windows RT are those that use the Metro interface and are distributed through the Windows Store. At the moment, there just aren’t that many applications, and many of the ones that exist are mediocre,” wrote Peter Bright in Arstechnica. 

“For a device that’s supposed to feel more like an appliance, with seamless and beautiful software, there are a number of weird moments that scream “computer!” like black-and-white nightmares bursting into rainbow dreams. In general, the desktop environment feels like a trick, a kludge, because Microsoft didn’t have a fully touch oriented version of Office ready to go — so every time you want to use Word or Excel, you’re launched into Windows circa 2000-whenever,” writes Matt Buchanan of Buzzfeed.

“This is a great device. It is a new thing, in a new space, and likely to confuse many of Microsoft’s longtime customers. People will have problems with applications — especially when they encounter them online and are given an option by Internet Explorer to run them, only to discover this won’t work. But overall it’s quite good; certainly better than any full-size Android tablet on the market. And once the application ecosystem fleshes out, it’s a viable alternative to the iPad as well,” said Mat Honan of Wired.

“By supporting an ultra-thin, feather-light full keyboard accessory, the Surface instantly becomes one of the best tablets on the planet in terms of productivity without adding any bulk. Typing on a soft polyurethane keypad is not the same as typing on a regular keyboard of course, but I got pretty good with it after a few days of practice,” BGR,” said Zach Epstein of BGR.
“Overall, Microsoft has designed a beautiful tablet that’s unfortunately more functional as a laptop… on a desk. The styling and components are incredibly well made and high quality, but the form factor isn’t svelte or small enough to really come across as a true hybrid,” said Joshua Topolsky in the Verge.

“While (other) devices are primarily targeted at content-hungry consumers, the Surface is a slate upon which you can get some serious work done, and do so comfortably. You can’t always say that of the competition. It’s in the other half of the equation, that 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,” said Tim Stevens of Engadget.

Stay tuned for our own review of Surface, as we take a look at Microsoft’s latest attempt at post-PC technology.

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Now this isn’t a new concept at all. In fact, it’s one of the key talking points that Microsoft has used for the past two to three decades. By creating a software platform that supports a vast array of hardware components, computer makers can design devices as they see fit. Google actually provides the same strategy with Android, which is why you see smartphones and tablets in varying shapes and sizes running on Android. Contrast that to Apple, which keeps everything in-house: From software to hardware to services, Apple designs products with minimal variance between models. That provides a different advantage in that Apple’s products are highly optimized and work consistently.

Seeing this new LG Windows 8 device over at Liliputing is what reminded me of this difference. Take a look at the LG H160 tablet: It’s not for everyone, but there’s likely to be a group of consumers or enterprises that crave a tablet type of computer that has a slide-up mechanism hiding a full QWERTY keyboard under the screen.

LG can do that because it controls the hardware design that runs on Microsoft’s software. Going back to the Apple comparison — you won’t likely every see various iPads with and without keyboards or with a choice of a half-dozen screens sizes. Heck, it’s nearly been 3 years since the first iPad was announced and we’re just now expecting to see a new one with a smaller screen.

Ironically, while this is a key advantage for Windows 8, it almost seems that Microsoft is trying to have it both ways with Windows RT. The Surface tablet, which I expect to get some hands on time with later this week, is an all-Microsoft product from beginning to end, the same approach that Apple uses. That represents an important strategy change for Microsoft as it historically hasn’t designed or made Windows computers. But other hardware partners will also be making and selling Windows RT tablets so in the near future, form factor choices will follow the Surface tablet. So that advantage of “choose the hardware design you like” will filter down to Windows RT as well.

Regardless of whether you like a company to design both your device hardware and software or not, evidence suggests that consumers desire more choices. There are a number of factors why Windows — and for that matter, Android in its respective market — has a majority platform market share. Choice of hardware is surely one of those factors, which of course, is highly related to price differentiation  And that’s something I neglected when thinking about Microsoft making its case to generate interest in Windows RT and the Surface tablet. The company still has to deliver useful software and services, for sure. Choice of hardware, however, can help make up for deficiencies in other areas.

As devices become more personal than ever before, I think this choice may be worth more now than it did, say five or 10 years ago. Am I placing too much emphasis on it? Drop me a note in the comments and let me know how much the hardware choice actually plays into your purchasing decisions.

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However, I’m starting to wonder who fits in that market.

I thought long and hard about this, mainly because I often buy new gadgets on the first day they are available. Sometimes I even import them early from other countries at a premium price to get my gadget fix. But after thinking it through, I opted not to buy a Surface RT tablet at this point. Why? Because Microsoft hasn’t demonstrated why I should.

Maybe the message is lost on me and not you

Let me step back a second by saying this logic definitely applies to me; it may or may not apply to you. And I’m not suggesting it’s a bad product by any means; that would be premature and irresponsible. I’m simply looking at the message that Microsoft is providing and the timing of the product in today’s market as it applies to competitors and Microsoft’s future. Also, one disclosure: I earned the Microsoft MVP award in Tablet PCs — from Microsoft itself — for several years, starting in 2006. I’ve been a Microsoft Tablet PC fan in the past and had high hopes for the platform, but times have changed.

So what is the message about Windows RT and this new tablet? On the surface — no pun intended — the message I hear is that Microsoft has a consumer-friendly touchscreen tablet that’s priced in the same range as other great devices; namely the iPad. I see some potential issues here. First is the cost. As I noted earlier this week because I don’t see a huge value-add for Windows, I would have liked to see the device priced about $50 to $100 less. I’d pay the same or a premium if there was a reason to. A majority of readers agreed on the cost, at least those who participated in our poll: 58.8 percent said the product was priced too high.

Note that I called this a consumer-friendly tablet. Why? Because in three months, Microsoft will have the Surface Pro running Windows 8, not the Windows RT version on the currently available slate. Surface Pro is more likely to attract enterprises and such because it’s a full-powered machine with no Windows software limitations. And that gets me back to Windows RT; specifically why I don’t think Microsoft has made a good enough case for widespread success.

It’s tough to start a new mobile platform now

Essentially, Windows RT is a brand new mobile platform and IT will face the same challenges as any other new mobile platform. Think of BlackBerry 10, which arrives early next year. Look back at Palm’s webOS system that never built up momentum. Microsoft’s own Windows Phone platform faces the same struggle, even now. For the moment, iOS and Android are the platforms that dominate the mobile space due to widespread adoption and thriving ecosystems with vast amounts of apps, media and services. Remember that Windows RT doesn’t run legacy Windows apps — even though some Microsoft Store reps aren’t explaining this well. If it did, this would be less of a problem.

Coming back to my own decision-making process then, what has Microsoft done to convince me to drop iOS or Android tablets for a Surface RT tablet? Not much, at least not yet. I’ll want to hear more about the app story, just as I did for Android; I didn’t adopt Google’s platform for months after launch until I saw the app market start to thrive, for example. Microsoft Office is one differentiator, of course, but if that’s coming to iOS and Android next year, that advantage quickly goes away for most. And to be honest, Office isn’t enough for me personally to make a switch. Come to think of it, nothing Microsoft has said yet is enough for me to make the move.

Again, I’m not trying to condemn a product I haven’t used; I’m simply looking at the message being sent in comparison to what’s been available for two or more years. And I’ll be attending a Microsoft press event next week where I should get some hands-on time with a Surface RT tablet. Maybe I’ll change my mind, but I’ll surely be asking one key question to Microsoft reps there: What’s the compelling reason for me — or anyone else, for that matter — to choose a Surface RT tablet over a competing iOS or Android slate?

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Asus, Samsung, Lenovo and Dell are the first four companies that will build and sell Windows RT tablets, although others are sure to follow in 2013. The first two choices make perfect sense, No. 3 less so (but is still understandable), and the Dell news doesn’t inspire me. Of the four partners, Dell has arguably seen the least success is trying to crack the consumer market. Yes, we’re talking about Windows PCs with Windows 8, but in my mind the Windows RT tablets are more consumer electronics devices than traditional computers.

Sorry, Dell, it’s not me, it’s you

Dell had a good run with its Axim line of personal digital assistants starting back in 2002, but it eventually left that market in 2007 and made no headway with its few smartphone efforts, such as the Dell Streak, Venue and Aero. The Dell DJ digital audio player came out around the same time as the Axim, but, of course, the iPod swallowed up market share and competing products faded away. Maybe Dell will prove me wrong with some differentiator or fresh design, but even one of the most expensive tablet PCs from the company prompted terrible reviews and cries for a recall.

Again, maybe Dell can change my mind, even if history has shown little to no hope for later this year. But this uncertainty and a lack of consumer focus will be the biggest challenge to Dell. Microsoft has to know that, leading me to think Dell pushed hard to be chosen as one of the first four Windows RT partners. I’d say Dell has the longest of odds of being successful in the Windows RT market.

Lenovo has shown promise but hasn’t delivered yet

Lenovo hasn’t had much more success, but what it has had are some entries into the Android tablet market that provided it with some useful experience here. And as far back as 2010 when smartbooks were still a possibility — a category I suggested Apple’s iPad quickly killed off — Lenovo had some impressive designs that were precursors to the Windows RT tablets arriving soon.

Back in late 2009 I saw some of those first designs: Lenovo partnered with Qualcomm to show off its smartbook device, but it never came to market. A few months later Apple announced the iPad, and it was back to the drawing board for Lenovo. The company dropped a custom Linux build for the next iteration, called the U1 Hybrid (shown), and went with Android instead. The laptop-like device had a removable display that became an Android tablet, but it was a Windows 7 notebook when docked.

Again, even though this device never went on sale, the point is that Lenovo has created interesting designs it can learn from when building its Windows RT products. You can see that in the Lenovo IdeaPad Yoga, likely to be the company’s debut product when Windows 8 launches in late October. That laptop has a patented hinge to allow the device to stand up and be used as a convertible tablet.

Asus and Samsung are the leaders, with the former having a slight edge

Why would I suggest Asus and Samsung have a shot to lead the Windows RT market? First, there’s relatively little competition, and second, both have proved they can design, build and sell consumer slates. We know that neither is competing well with Apple’s iPad, but of the tablets that are worth a look, they’re all built by Asus and Samsung.

I give Asus the slight edge here though. While Samsung has focused on various-sized slates for different markets, Asus has kept its product line a little more manageable with 7-inch and 10-inch slates. It was also chosen to build the Nexus 7 tablet for Google.

A standard size allowed for what I think is the most innovative product feature in this market: a dock that doubles as both a keyboard and a second battery. I’m talking about the Asus Transformer that I reviewed earlier this year; the form factor and features were excellent. And Asus is wisely reusing the concept for Windows RT with its Tablet 600.

Samsung could take a similar approach with a keyboard dock, or it might simply focus on the slate device itself. Regardless, the company knows how to make a good tablet, plus it has a rich history of making Windows notebooks as well. The first Samsung iteration for Windows RT should be serviceable, but I still think Asus will be seen as the bigger innovator.

Don’t forget about Microsoft’s Surface

The other new factor is that Microsoft is competing against its own licensees with the Surface. My first impressions are fairly positive here: Microsoft has designed a compelling choice for this market, and the product has some of the sexiness equated with the iPad. The cover with integrated keyboard in particular looks not only useful but also to be an extension of the Surface tablet itself.

Although Microsoft’s Zune player fizzled, the Surface looks to sizzle. And outside the Zune debacle, Microsoft does have some consumer-electronics wins, most noticeably with one of the best-selling game consoles of all time: the Xbox 360. Perhaps Microsoft will be the biggest surprise here and end up leading the pack when it comes to the Windows RT market.

Update: The original article incorrectly stated that the Xbox was the best-selling game console of all time. The copy has changed to reflect that it is one of the best-selling.

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