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Microsoft's Surface strategy: Flatten the PC

Mark Hachman | Oct. 7, 2013
With the Surface 2, Microsoft isn't just trying to dominate the tablet market. It's hoping to replace the PC market.

"What we're hearing from businesses, and we're hearing it continuously, is that [they] want to buy one product for employees," Panos Panay, the corporate vice president for Surface computing, said at the Surface 2 launch. "We hear it from people: 'We need one product to work and play on, and of course, I need one product to take to work and use as my full-powered PC.'"

And that one product is the Surface 2.

Unfortunately, a legacy of failure

The PC is itself a fine example of modular computing, which is defined as a series of replaceable parts that use standard interfaces. Graphics cards fit into PCI Express slots, power supplies use consistent pinouts, and hard drives use a SATA connection of some sort.

But later attempts to separate the various systems within a computer have failed, apparently because the companies involved were unable to convince consumers that a modular computer offered more value than a purpose-built notebook did. In 2002, for example, IBM separated the power supply, I/O connectors, and display from the computer, creating what it called the MetaPad, a computer the size of a 3-by-5 card. Based on a Transmeta chip, the MetaPad could be "transformed into a handheld, desktop, laptop, tablet, or wearable computer in seconds, without having to be rebooted," IBM claimed at the time. (IBM declined to comment for this story.)

IBM called the MetaPad a research project. Eventually it licensed the design to Antelope Computing, which tried and failed to make its version of the MetaPad a success.

"Basically, in a nutshell, I would have to say that the business model didn't work as planned," Kenneth Geyer, chief executive of Antelope and now vice president of business development of Liteye Systems, says. "It failed to be able to manage customer expectations, with everyone wanting different kinds of accessories: tablet, laptop, handheld, custom handheld, vehicle dock, et cetera. I believe it would have been a better approach to have focused on just building the core computer and providing that to partner companies who built accessories or systems around it."

Other attempts followed. In 2011, Motorola launched the Atrix, a relatively impressive smartphone in its own right, but with a twist: Users could insert it into a notebook "dock" that turned the smartphone into a small portable computer. Unfortunately, the user experience was frustratingly slow, hampered as much by the hardware as by AT&T's HSDPA connection. But the fatal blow was struck by Motorola's sales department, as the price tag for the dock alone was $500. Pricing the Atrix and its dock hundreds of dollars higher than a more competent netbook or laptop ultimately doomed the experiment.


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