Upon seeing the presentation of Microsoft's (MSFT) Surface, basically a Windows 8 tablet, I have to say that this product, along with other Windows 8 tablets, will be competitive. They will be competitive with Apple's (AAPL) iPad in the mid to high range market, and will destroy such a market for tablets based on Google's (GOOG) Android.
Why is this so? It's not because of some kind of hardware brilliance by Microsoft or others, though the Surface has many nice touches, such as the built-in stand and especially the covers that double up as keyboards. No, it's rather something more basic and intrinsic.
It's the fact that these tablets will really enable people to fully substitute carrying a laptop around. They will have enough flexibility, enough power and the right software for doing so. This is something at which the iPad still fails (and where Android does even worse).
Those in households having iPads and laptops probably reached this conclusion as well. When you are traveling and plan on doing some work, do you ever take only the iPad? I know I don't. I take the iPad and the laptop. The iPad ends up being used mostly for entertainment, whereas the laptop does all the heavy lifting, from running Word, Excel, Programming, a Database (I actually have SQL Server on my laptop), running the broker's trading workstation, etc. Most of this can't be done in practical terms on the iPad, even if there are attempts to replicate some of the functions. Yet the Windows 8 tablets, Surface included, promise to be able to fill those roles. Indeed, Windows RT - which won't be able to run legacy software - also seems to recognize this and will come bundled with Office right from the start.
A possible downside
While I believe that this will make Microsoft-based tablets competitive, its Surface Pro version still seems a bit half-baked. In the attempt to feed it Intel's (INTC) Ivy Bridge i5, the device ended up being a little on the thick side and needing active cooling. It would seem Microsoft would do better to have a second go at this and use a slightly less powerful Intel processor, to get the device using passive cooling and getting a bit slimmer.
There's also speculation regarding battery life, but taking into account the battery size in the Surface Pro (42 Wh) - which should be the one with higher power requirements due both to the more advanced display and especially the Intel i5 architecture - and knowing the battery life on comparably spec'd Ultrabooks, I'd expect the minimum claimed endurance will be around 6-7 hours, which is reasonable.
Albeit with a few rough edges in the Surface Pro model, Microsoft seems to be positioning itself to have a truly competitive product in the tablet market. This still doesn't solve the positioning in the mobile phone market, but it's a start. The biggest losers from this market entrance will probably be other mid to high end tablets, especially the Android-based ones, but it's also likely that the iPad will see its market share drop, given the better functionality these Windows 8 tablets will likely deliver.
At this point, the low end of the tablet space will probably remain free of Windows 8 competition. It will be hard for Windows to compete in the sub-$200 space with the OS being rumored to cost as much as $85 per license. This market segment should also be about to see news out of Google, and a further lowering of the price bar by Amazon.com (AMZN).