Microsoft Corporation (MSFT) has been a software powerhouse since its windows operating system began to dominate the home computing market in the 1980s. The latest development in the Windows operating system line is Windows 8 and RT. Unlike previous releases of Windows, Microsoft decided to showcase its latest OS with its own hardware, the Surface for Windows RT and Windows 8 tablet. Now, this isn't Microsoft's first foray into hardware, its Xbox gaming consoles and computer peripherals have sold well.
But, is Microsoft's latest move into the computer hardware market an act of desperation to stall Apple Inc.'s (AAPL) runaway machine that has been running over the smartphone, tablet, and laptop markets? Or is Microsoft simply taking it upon itself to make sure that Windows 8 has a successful launch into the tablet market? Perhaps both. Let's take a look at how Windows Surface stacks up to Apple's iPad.
Surface for Windows RT
Surface for Windows 8 Pro
iPad (3rd Generation)
NVIDIA Tegra-based ARM
Intel Core i5 (Ivy Bridge)
10.6-inch ClearType HD (1366 x 768)
10.6-inch ClearType Full HD (1920x1080)
9.7-inch Retina Display (2048×1536)
Windows RT and Office Home & Student 2013 RT
Windows 8 Pro
2×2 MIMO Wi-Fi
2×2 MIMO Wi-Fi
4G LTE, Wi-Fi, Bluetooth
32GB or 64GB
64GB or 128GB
16, 32, or 64GB
Touch Cover, Type Cover, VaporMg Case & Stand
Touch Cover, Type Cover, VaporMg Case & Stand, Pen with Palm Block
microSD, USB 2.0, Micro HD Video
microSDXC, USB 3.0, Mini DisplayPort
Sources: Engadget.com, Apple.com
Hardware-wise, Surface for Windows RT and Windows 8 Pro are comparable to or better than the iPad in every category except for screen resolution and connectivity, where the iPad's pixel density and 4G LTE clearly beat the Surface tablets. Otherwise, it is a toss-up between Apple's A5X and NVIDIA's tegra-based ARM chip depending on the benchmark, and the Intel Core i5 handily beats both processors. Arguably, the biggest hardware breakthrough of Microsoft's release is the included touch cover keyboard built into its case, helping to bridge the user ability gap between the tablet and laptop.
Software is the defining factor in whether the Surface sinks or floats in the tablet market. The Windows 8/RT operating system is markedly different from iOS 5 as it is more geared to enterprise/work applications with its Microsoft Office support and built-in keyboard. On the other hand, Windows 8/RT lacks the vast and developed app market that Apple boasts making it less appealing to the casual tablet user.
All in all, the Windows 8/RT Operating Systems target a very specific niche in the tablet industry; it is designed for users who are looking for the full functionality of a laptop in a tablet, and enterprise-based users who seek more mobile alternatives to a laptop or desktop.
Microsoft is a latecomer in a brutal industry that has already taken casualties (Hewlett-Packard Co. (HPQ), Research In Motion Limited (RIMM)). But, perhaps, Microsoft has learned a thing or two from the mistakes of those that came before it. Instead of taking Apple head on, Microsoft has decided to target a specific niche within the tablet industry.
With its Windows 8/RT operating systems, Office Suite and built-in keyboard, the Microsoft Surface has bridged the gap between laptop and tablet, appealing to users who seek the full functionality of a laptop rather than a smartphone in a tablet. What does this mean for investors? Microsoft should be able to steal market share in the tablet industry from Apple.