Microsoft still isn’t divulging official Surface numbers, but it looks like it’s at least making a (tiny) dent in the tablet market.

Microsoft shipped 900,000 Surface tablets for the first quarter, accounting for 1.8 percent of the tablet market, according to IDC’s latest tablet numbers. Altogether, Windows 8 and RT tablet shipments across all manufacturers hit 1.8 million during the quarter.

Those numbers are slightly less than Strategy Analytics’ latest figures, which noted that 3 million Windows tablets were shipped for the quarter. The true numbers likely lie somewhere between those two figures.

While Microsoft is clearly just getting started with the Surface devices, its numbers seem particularly poor compared to Apple’s 19.5 million iPads shipped in Q1, as well as Samsung’s 8.8 million units shipped. Surface shipments were likely hurt by their limited availability and the late release of the Surface Pro, which started shipping in February in the U.S. and Canada.

PC shipments also dropped precipitously in the first quarter, and IDC wasn’t shy about blaming Windows 8 for the decline.

The Surface Pro made up most of the Surface units shipped, according to Strategy Analytics. I found the Pro to be a far more useful device than the Surface RT, mostly due to its speedy Intel processor (which can also run older Windows programs).

If you needed further evidence that tablets are more than a mere computing fad, just look at the latest numbers from Strategy Analytics.

The firm found that the tablet industry more than doubled in the first quarter — reaching 40.6 million units, up from 18.7 million last year. This was a significant quarter since we have more than two major companies backing tablet platforms, and consumers have plenty of inexpensive tablets to choose from.

In particular, it’s worth paying attention to Microsoft’s figures. The company is finally on the map in the tablet industry, with 3 million Windows tablets shipped, which includes both Windows 8 and Windows RT (Surface) devices. While that only makes up 7.5 percent of global tablet market share, it’s a notable figure, since Microsoft didn’t even have a tablet strategy last year (we can exclude the handful of Windows 7 tablets nobody bought).

Apple, not surprisingly, is still leading the tablet industry. The company reported 19.5 million iPads shipped for the quarter, up from 11.8 million last year. But Apple should also pay attention to how much Android slates are gaining on the iPad. Strategy Analytics reports that 17.6 million Android tablets were shipped in Q1, up from 6.4 million.

Now Apple and Google are basically neck and neck for the top spot in the tablet world. Android made up 43.4 percent of the global tablet market for the quarter, while Apple held 48.2 percent, falling around 15 percentage points from last year.

For the most part, it was small and cheap tablets like the Nexus 7 and Kindle Fire that helped Android gain so much ground so quickly. At $329, the iPad Mini is still significantly more expensive than $200 Android tablets.

Apple’s big problem? Android tablets will continue to get cheaper and there will be more of them to tempt consumers. Apple, on the other hand, will be stuck iterating the iPad and iPad Mini over the next few years (likely at the same prices).

At this point, it looks like Android will end up dominating tablets pretty soon — something I previously thought would take years to do.

Photo: Devindra Hardawar/VentureBeat

Confirming earlier rumors, departing Microsoft CFO Peter Klein said today on an earnings call that Microsoft is working with manufacturing partners on smaller versions of Windows 8 devices, which likely means 7- or 8-inch Windows 8 tablets.

Klein said that “a new suite of small touch devices powered by Windows” would be available “in the coming months.” He did not say Microsoft would be making its own smaller Windows 8 devices, but that’s certainly not out of the question considering the release of the 10-inch Surface and Surface Pro tablets.

Microsoft recently lowered the minimum resolution requirements for Windows 8 devices, which opened the door for less expensive 7-inch or 8-inch tablets powered by Windows 8.

A recent Wall Street Journal report also said a 7-inch Microsoft Surface tablet was in the works.

On top of hosting today’s call, Klein announced that he would be leaving the company at the end of its current fiscal year. Klein has worked for Microsoft 11 years and served as CFO for about four years.

Surface Pro photo via Devindra Hardawar/VentureBeat

Microsoft’s next round of Surface slates may include a competitor to the iPad Mini and Kindle Fire.

The company is reportedly working on a 7-inch Surface tablet, which is expected to go into mass production this year, the Wall Street Journal reports. It’s unclear if this is the same gaming-focused 7-inch Xbox Surface tablet we heard about last year — but I’d wager they’re two separate products.

From what we’ve heard of the Xbox Surface, it’s going to be jam-packed with cutting edge hardware, which means it likely won’t go cheap. At the same time, Microsoft will also need an inexpensive small tablet to compete with Apple and Amazon.

Small tablets (under 8-inches) accounted for half of all shipments in the fourth quarter, according to IDC. Given just how much cheaper smaller tablets tend to be — ranging from $200 for the Kindle Fire and Nexus 7, to $329 for the iPad Mini — they’ll certainly end up taking over much more of the market over the next few years. Microsoft simply can’t afford to wait on developing an inexpensive small tablet.

Additionally, the WSJ notes that Microsoft is still testing a Surface phone, though component suppliers aren’t able to confirm if it will ever be released. We’ve heard a Surface phone could appear this year, especially if Windows Phone 8 fails to catch on with consumers.

Photo: Devindra Hardawar/VentureBeat

Microsoft has dropped the resolution requirement for Windows 8 on tablets to 1,024 by 768, opening up the possibility for less expensive 7-inch or 8-inch tablets running the fledgling operating system.

While the company has released its own Surface tablets and Microsoft partners have released Windows 8 tablet/laptop hybrids, the smart play is to offer 10-inch and 7-inch experiences to hit every possible market. Apple, for example, offers both the iPad and iPad mini. Samsung, Google, and Amazon also offer a variety of tablet sizes. So it would be smart for Windows 8 to come to 7-inch screens to compete with the offerings of all these other players.

Microsoft quietly announced the changes in a “Windows Certification Newsletter” released March 12, but it was spotted by ZDNet on Thursday. Microsoft writes in the newsletter:

We’re changing the System.Client.Tablet.Graphics.MinimumResolution requirement to create a consistent minimum resolution of 1024 x 768 at a depth of 32 bits across all Windows 8 system form factors. The physical dimensions of the display panel must still match the aspect ratio of the native resolution. This doesn’t imply that we’re encouraging partners to regularly use a lower screen resolution. In fact, we see customers embracing the higher resolution screens that make a great Windows experience. We understand that partners exploring designs for certain markets could find greater design flexibility helpful.

At the lower resolution, Microsoft notes that the “snap” feature will end up being disabled to create a better experience. Manufacturers will need to disclose that snap is disabled.

Microsoft also used this newsletter to announce that Windows 8 tablet screen sizes peak at 17 inches and can be no larger than that.

Microsoft Surface photo via Devindra Hardawar/VentureBeat

In addition to running companies, most CEOs have mastered a greater, more common art: giving lengthy interviews wherein they say nothing at all.

Microsoft CEO Steve Ballmer is an exception to that, or at least he was in his recent interview with MIT Technology Review. His most interesting view? He doesn’t foresee the Surface taking over the world.

“In an environment in which there’s 350 million PCs sold, I don’t think Surface is going to dominate volume, but it’s a real business,” he said in the interview.

Ballmer’s view, while obvious to anyone who’s ever used the Surface (or pays attention to PC sales numbers), is a refreshingly realistic take on the situation that the Surface finds itself in. While shrinking, the PC market is huge, and the Surface is just a tiny part of it. Ballmer is really just trying to temper expectations.

But the mission behind the Surface is greater than just raking in cash for Microsoft. From the beginning, the device was meant to serve as an example for Microsoft’s hardware partners, who have had a mixed track record with the transition to Windows 8.

Essentially, the Surface is central to Microsoft’s position at the center of the Windows PC market — regardless of how well the device itself sells.

Photo: Devindra Hardawar/VentureBeat

Just hours after becoming available in the U.S. at Microsoft’s online store, the tablets are shown as out of stock. While frustrating for shoppers, this is a good sign for Microsoft whose first surface tablet was rather disappointing.

VentureBeat reviewed the Surface Pro last week and found marked improvement over the Surface RT. This tablet has an Intel processor and can run the full version of Windows 8, as older versions of the software. The positive reviews evidently filtered down to consumers, who got straight to buying once the merchandise became available.

The 128GB model costs $1000 and the 64GB costs $899, with touch/type covers sold separately. The Pros are likely still available in brick-and-mortar retailers like Best Buy.

One of the juiciest: Surface Pro is able to run other operating systems than the default Windows 8.

Reddit user Nygmatic asked the question:

For the Surface Pro….is the boot loader unlocked? Can I do what I want with my (potential) property? Or am I locked in to Windows 8?

Microsoft’s first Surface tablet was all about disappointing compromise, but the new Surface Pro is full of possibility.

It has an Intel processor, so it can actually run older Windows software. It features a sharp 1080p display that makes text, pictures, and movies pop. And it has has a stylus pen … for some reason.

The Surface Pro ($899 for the 64GB version, $999 for the 128GB model) isn’t perfect, but it comes much closer to Microsoft’s initial vision of the Surface as a machine that can serve as both a fully functional laptop and a solid tablet. Unlike the Surface RT, released just a few months ago, it’s more than just a heavy tablet in a PC’s clothing.

While testing the Surface Pro over the past week, I often forgot that I was using an entirely new type of computing device. It simply felt like a fast Windows 8 laptop. And while it’s far less transparent when used as a tablet, mostly due to its weight, the Surface Pro still worked well enough for casual usage while on the couch or in bed.

It’s close to the no-compromise device I was looking for when I reviewed the Surface RT — though we’re not quite there yet.

The Good: Fast, flexible, and polished

The high points of the Surface RT also apply to the Surface Pro. It features the same polished design, a case made out of a durable metal called VaporMG, and a kickstand that pops out with a satisfying thunk. I was shocked at how well-constructed the earlier Surface RT was, and the Surface Pro gave me the same impression, albeit with a bit more heft.

The Surface Pro weighs just under 2 pounds, compared to the Surface RT’s 1.5 pounds, but the slightly greater weight comes with a payoff; it’s a far more functional machine. The Surface Pro sports a third-generation Intel Core i5 processor running at 1.7GHz, along with 4GB RAM. That’s a huge step above the Surface RT’s Tegra 3 processor and 2GB RAM, and it shows.

Even though it has the same 10.6-inch screen size, the Surface Pro features a much higher-resolution 1080p display than its predecessor. That means it can run HD movies at their highest resolution, and it also makes just about everything on the screen extra sharp. The screen also supports multitouch with up to 10 fingers, while the previous Surface only supported five.

A dream to use

Launching programs, moving around the OS, and opening large media files was buttery smooth with the Surface Pro. For the most part, it managed to keep up with my typical workflow, which involves having several browsers open with dozens of tabs, a media program (Spotify, these days), and an instant messaging client (typically Trillian). In comparison, the Surface RT struggled to launch processor-intensive apps, and its paltry amount of RAM made multitasking a pain.

The Surface RT never quite fit into my workflow because it could only run Windows 8 apps — not so with the Surface Pro. Its Intel processor means it can run any Windows application that ran on Windows 7. I was able to run browsers other than Internet Explorer (there’s still no Chrome or Firefox version for Windows RT), and I even installed iTunes for fun. The freedom and flexibility of the Surface Pro made the limitations of the Surface RT seem even more egregious in retrospect.

Gamers will also appreciate the horsepower behind the Surface Pro, as it’s capable of playing a lot more than just Angry Birds. I installed Valve’s Steam client and was able to pull down Half-Life 2: Episode Two in around 15 minutes. The game took about 20 seconds to launch, and loading the first chapter took only around 12 seconds. That’s about on par with my giant desktop, which has a modern Nvidia GTX 560 video card and a three-year old quad-core processor.

I was able to play Episode Two smoothly at 720p with midrange graphics settings, which was more than adequate for the Surface’s screen size. That’s pretty impressive for a computer with only integrated graphics capabilities. (Going up to full 1080p gaming is perhaps asking for too much: At that setting, Episode Two was playable, but with a low framerate.)

The Surface Pro’s battery life was comparable with other ultraportables, lasting around five hours on a full charge. It’s paltry compared to tablets like the iPad, which typically get around ten hours of usable battery life, but the difference is understandable given the Pro’s size and horsepower.

Ultimately, I was impressed at what I was able to do with the Surface Pro. It’s particularly impressive that it’s lighter than Apple’s 11-inch MacBook Air, which at 2.4 pounds is one of the lightest ultraportables around. This is where the Surface’s dual identity comes in handy: It may be hefty for a tablet, but it’s a featherweight dream when compared to other ultraportables.

I’ve been hesitant to recommend any tablet as a PC replacement so far, but the Surface Pro’s capability to offer the best of a complete PC while also dabbing in tablet territory could make it the only computing device some may need.

The bad: Even more awkward as a tablet

I’m no fan of big tablets, and the Surface Pro is by far the biggest tablet I’ve come across yet. It’s far too heavy to hold one-handed (even for short periods), and its wide screen makes it awkward to balance as well. In a time when we have small tablets like the iPad Mini weighing in at .68 pounds and roughly the size of a paperback, the Surface Pro feels like a dictionary.

But I suppose that’s the price you pay for including the hardware necessary to make it a functional Windows 8 ultraportable as well. I was disappointed in the Surface RT because it felt mostly like a tablet. But because the Surface Pro feels more like an ultraportable, its tablet deficiencies seem less egregious. Eventually, I got used to holding it on my lap or knee for casual web browsing.

When it comes to its size, the Surface Pro sits in a space all by itself right now: It’s lighter than other ultraportables, but far heavier than other tablets. That makes it easy fodder for gadget geeks who want the Surface to fail, but I see it more as a sign that Microsoft is actually daring to be different than the crowd.

I didn’t spend much time with the Surface Pro’s stylus pen, mostly because there wasn’t much of a compelling reason to use it. It’s helpful for doodling in image editing apps, but I’ll never get used to taking handwritten notes on glass screens (sorry, Galaxy Note fans). It was particularly useful for navigating Windows apps that weren’t optimized for touchscreens, though I don’t think that was Microsoft’s intent.

The Windows 8 problem: Apps and stability

Windows 8 apps aren’t exactly helping the Surface Pro’s tablet standing either. Microsoft has managed to get a decent selection of Windows 8 apps, but there’s nothing that feels truly groundbreaking or inspired. I spent most of my time with the Surface Pro inside of the desktop environment running older Windows apps.

Microsoft also has some work to do when it comes to the Surface Pro’s stability. It would occasionally get stuck in portrait mode, and on several occasions, the Surface failed to recognize the touch and type keyboards. Rebooting fixed most of the issues I ran into, but I also had a few blue screen crashes when repeatedly plugging and unplugging the keyboards. (At least Windows 8’s blue screen of death has a frowny face. Upgrade!)

The verdict: This is the Surface you’ve been waiting for

For all of its failures as a pure tablet, the Surface Pro is a compelling offering as an ultraportable/tablet hybrid. The Surface RT gave us a mere glimpse at the future of computing, but the Surface Pro’s combination of power and flexibility brings it right to your fingertips.

It may not be for everyone, but it’s worth serious consideration if you’re looking at Windows 8 ultrabooks. I have a feeling we’ll look back at the Surface Pro as the first time Microsoft’s Surface dream was more reality than hype.

For once, the future seems bright for Microsoft.

Additional takeaways:

• I wrote this entire review on the Surface Pro using the Type Cover (which has mechanical keys) something that I found impossible to accomplish on the Surface RT due to a keyboard bug. I was able to type as quickly as I usually do, and I didn’t notice any significant increase in typos.
• On the other hand, I’m still no fan of the Touch Cover (whose pressure-sensitive keys are embossed into the surface) — I used it to take notes during an interview and was left with complete gibberish.
• Yes, the title of this review was taken from John Woo’s seminal crime drama A Better Tomorrow.

Microsoft sold a paltry number of Surface tablets in the last quarter — somewhere between 680,000 and 750,000 units — research firm IHS iSuppli told CNet.

The firm estimates that Microsoft shipped around 1.25 million Surface tablets in the quarter, which makes the low sales figure even more depressing for Microsoft. Additionally, IHS iSupply noted that return rates for the Surface were “very high.” (Those return rates aren’t surprising, given how much the Surface disappointed me in my review.)

“If you put the high return rate together with low sell-through [sales out] rate, that’s indicative of a problem,” iSuppli analyst Rhoda Alexander told CNet. She pointed to the steep learning curve of Windows 8 as one potential issue. I’d wager that many consumers have also been frustrated by the inability to install normal Windows apps, and the small number of Windows 8 apps available.

While the sales estimates aren’t exactly rosy for Microsoft, Alexander also notes that they’re similar to the results from some Android devices. (That’s not exactly a good thing, since most Android devices don’t sell well.) She also points out that the Kindle Fire had similar issues when it launched — but it has since gone on to carve out a decent chunk of the tablet market.

With the Surface Pro tablets on the horizon, which have Intel processors and can run full Windows apps, Microsoft may need to work hard to entice consumers who weren’t interested in the Surface RT.

If you like to get your money’s worth out of your purchases, it’s best to stay far away from the 64GB Surface Pro.

Microsoft is confirming to various news outlets today what we’ve for so long feared: In terms of free storage, the Surface Pro is a really bad deal.

Owners of the device will be left with a paltry 23GB of usable space after the installation of system files and onboard apps, which together take up over 60 percent of the device’s 64GB. 

While the situation is a bit better with the 128GB Surface Pro (which leaves users with 83GB of storage), the 64GB model’s numbers are actually worse than those of the 32 GB Surface, which only offers 16GB of useable storage.

Microsoft isn’t alone here, of course, as just about every device ships with less storage space than advertised. The problem is that the Surface Pro takes that trend to a more troubling extreme: $800 for 23GB of usable space is simply an awful deal for consumers.

To rectify the problem, Microsoft recommends that Surface Pro owners turn to things like USB storage, microSD cards, and SkyDrive. Those solutions, however, don’t address the all-too-clear reality: Microsoft is misleading customers by advertising one product and selling them something very different.

Microsoft’s soon-to-be-released Windows 8-running Surface Pro may cost an internal organ plus a year’s servitude, but price relief — at least on other Windows 8 tablets — sounds like it’s coming soon.

“We’re working closely with chip partners and OEMs to bring the right mix of devices,” Microsoft’s chief financial officer Peter Klein said today on the company’s earnings call, adding that Microsoft is looking to “expand the product lineup” and provide “a greater variety of devices at a bigger variety of price points.”

Surface Pro, which Microsoft plans to release Feb. 9, comes in $900 and $1,000 versions. The original Surface, which runs a stripped-down version of Windows called RT, is available in $500 and $600 models.

“We think of Surface as one part of the overall Windows 8 story,” Klein said. “It highlights interesting innovation, and demonstrates tightly integrated software and hardware.”

Klein admitted that Surface has seen “limited distribution this quarter,” but he said that Microsoft’s “goal is to expand that” and is looking “forward to continuing the growth of that business.” Unfortunately, Microsoft did not break out any details on Surface sales in its earning release or the following conference call for analysts, preferring to speak mainly in generalities.

But analyst estimates of Surface sales for the holiday quarter have been in the 600,000 to 1,000,000 range … or about 3 percent of Apple’s sales of iPads in its recent record-breaking quarter. In other words, Microsoft desperately needs more models and better price points: A Surface Pro can cost more than a MacBook Pro, or double what many Windows 8 laptops run.

It wasn’t clear from Klein’s initial comments whether Microsoft itself might release more Surface models to potentially fill lower price points, or only work with OEMs. A Microsoft spokesperson I talked to after the call clarified that Microsoft is primarily addressing any need for lower price points on Windows tablets by working with OEMs.

Klein did not, however, reveal any timing for the announcement and release of new models.

photo credit: methodshop.com via photopin cc

Microsoft’s full-featured Surface Pro tablet finally has a release date: Feb. 9.

Launching three months after the original Surface (and later than Microsoft initially announced), the Surface Pro is supposed to be the more powerful alternative to its Windows RT-based counterpart. Equipped with a 10.6-inch screen, the Surface Pro’s best feature is actually on the inside: It can run legacy Windows applications.

The trade-offs? Those features mean that the Surface Pro is both thicker and heavier than the Surface. And with a starting price of $900, it’s more expensive, too — and that’s before you add extras like the $130 Type Cover. The 128GB Surface Pro runs for $1,000.

Unlike the original Surface, however, the Surface Pro isn’t meant as a entry-level consumer device (that’s the “Pro” part), which should make it easier for consumers to accept its price. For a lot of people, it’s the version of the Surface Microsoft should have started with.

Microsoft is planning a phased release for the Surface Pro, which will land first in the U.S. and Canada and elsewhere over the following weeks and months.

Windows RT and Mac OS are getting a lot closer, thanks to a particularly enterprising feat of jailbreaking.

Programmer Steve Troughton-Smith found a way to get an early version of Mac OS running on Microsoft’s Surface tablet, reports the The Verge. The hack, which builds on a jailbreak tool released by hacker Netham45 earlier this week, allows the Apple operating system to run inside Windows RT.

While there don’t seem to be many immediately useful applications for the Mac OS hack, the entire project is an interesting proof of concept for what can be done with both Windows RT and the Surface. Vibrant hacking communities often develop around easily hackable devices, even if the devices themselves don’t sell particularly well. Just take a look at the HTC HD2, which hackers love because they can’t install just about anything on it.

One thing, however, stands in the way of  the Surface matching the status of the HD2: Secure Boot, which prevents Windows RT devices from sideloading custom operating systems (and limits the Surface homebrew scene to the relatively limited hacks like the one you’re reading about now).

Microsoft itself hasn’t been too concerned with the hack, and in fact seems to be somewhat fond of it. “We applaud the ingenuity of the folks who worked this out and the hard work they did to document it,” Microsoft said on Tuesday, slightly alleviating concerns that it will patch the exploit — at least for now.

Advertising and analytics company Chitika released its December 2012 tablet market update, and the numbers aren’t great for any tablet that doesn’t start with the letter I.

“For every 100 iPad impressions, other tablets have 14.75,” Gabe Donnini, Chitika’s data solutions engineer, said today. “Eighty-seven percent of the tablet web traffic in North America is generated by iPad.”

The biggest chunk of that non-iPad traffic comes from the Kindle, with 4.88 pageviews for every 100 on the iPad. Kindle did grow a very healthy 20 percent month-over-month, however, compared to Chitika’s November statistics. These 4.88 pageviews translate into a 4.25 percent share of all tablet web traffic.

After Kindle, Samsung’s Galaxy has 3.04 pageviews to every hundred on an iPad. Google’s Nexus clocks in at 1.22 pageviews for every 100 on an iPad, and the Nook and Playbook are both under one. All Android tablets together have only  about nine web pageviews to every hundred on an iPad, if you don’t include the Kindle, or 14 if you do. And the Microsoft Surface, which was of course just released earlier this year, has only .22 pageviews for every hundred on an iPad.

This is not an impressive performance in a tablet market that is now almost three years old, based on when the first iPad was released.

Of course, the big question is: Will this change after the holidays? In other words, was it an iPad Christmas, or did more millions unwrap Android tabs this holiday?

“We’re in the process of generating a new report right now to compare pre-holiday and post-holiday traffic,” Donnini said. “We want to see who won the battle for market share … and see what people got on Christmas.”

That report will be coming out shortly, and we’ll have those details on VentureBeat.

photo credit: albyantoniazzi via photopin cc

Jack Gold is the founder and principal analyst at J.Gold Associates, based in Northborough, Mass. He covers the many aspects of business and consumer computing and emerging technologies.

Innovation. It’s what makes new markets. It’s what creates new opportunities for companies to grow dramatically. And it’s what creates demand when consumers don’t even know they want something.

We’ve seen innovation in the computer industry many times. And we recently saw it again when Apple created a market for its smartphones and tablets and took a commanding lead from the previous kings of the hill (e.g., RIM, Nokia, Microsoft).

Microsoft has been particularly hard hit as tablets have eaten into its core PC market. And its smartphone efforts have faltered for several years. Now Microsoft is fighting back with its latest innovation, Windows 8.

But Windows 8 has a legacy curve “trap” to deal with that, as a brand new platform, iOS didn’t. However, I believe iOS now is moving down the same legacy curve that is hampering Microsoft (and RIM, for that matter) and falling into the same trap. How radically can you change things without turning off your existing customer base? Your ecosystem? Your app selection and developers?

The fact is, the farther you move down the innovation curve, the more likely you are to have challenges. When you start from a green field position (as iPad/iPhone/iOS did), the innovation curve is just at it’s beginning, both because you have no base to work from and because there are no predetermined expectations.

But when you have an existing product, its much harder to innovate – both because you are primarily making fine tuning adjustments on next generation products, and because you don’t want to alienate your base by changing too radically from what they already know and like so they will continue to buy new products and/or upgrade.

So, getting back to Apple and Microsoft — it’s the best of times and the worst of times, in a Tale of Two OSes (OK, three if you add Android, and perhaps 4 if you add BlackBerry).

Which brings us to the recently launched iPad Mini and Microsoft Surface tablets. Both now have to satisfy the legacy needs of their partners. Arguably, Microsoft’s legacy baggage is more severe than Apple’s. But when many people asked recently why the Mini was relatively non-innovative, the innovation curve is the answer.

Unless Apple wants to completely reinvent the iPad and iOS, they have some real world restrictions (e.g., app compatibility, user interface, form factor). For its part, Microsoft knows it needs to maintain Windows compatibility to keep its ecosystem happy while at the same time appealing to new users. That’s why some describe Windows 8 as Windows 7 with a touch interface wrapper.

But the legacy effect in the mobile market doesn’t apply only to Apple and Microsoft. Now that Android is beginning to mature, it too will fall into the legacy trap. Google will continue to make enhancements/improvements, but new versions of Android can no longer be a radical departure from the previous ones, without requiring a restart of the ecosystem that has been built to date.

Further, this is exactly what RIM faces with BlackBerry 10. On the one hand, it needs to totally reinvent the experience to modernize its image. On the other hand, it has an existing ecosystem, albeit shrinking, that it doesn’t want to alienate. It will do its best to make both happy, but in the end, it has to go much higher on the innovation curve than a typical legacy calculation would allow simply to regain its shrinking market share. This is a much bigger gamble for RIM but it really has no choice.

So what does this mean for the market? All of the major vendors are now bound by a Legacy Trap that limits their overall ability to innovate (including Apple). This means you should expect refinements, rather than revolution. This is typical of mature markets, and although the tablet and smartphone markets are still fairly young, the maturity curve for new tech is now months or a few years at best, rather than the decades it used to take for older tech like PCs.

It also means that buyer characteristics will change. It’s not as much the mass crowds seeking the newest, latest gadget going forward. It’s more likely customers that will upgrade more slowly than before (more traditionally like other tech products). The amount of innovation will directly effect how soon/quickly the upgrades take place.

New product categories have a huge surge, while upgrade categories generally don’t. This may be one of the reasons for the relatively slow sales of the iPad Mini at launch (although it still had decent sales overall). It also means that the pace of new product introduction may actually slow somewhat as fewer feature upgrades make it less attractive for customers to buy every 9-12 months. And customers often will skip a generation (or two) before upgrading. Again, this may have had an effect on the Mini, as many “gotta have one” customers bought the iPad 3 earlier (and how many consumers really need/will buy one of each?).

This has been a factor with Windows PCs for several years, and it’s why Microsoft is still in the process of converting Windows XP users who skipped a generation (now potentially 2 generations). RIM had a similar problem getting users onto BlackBerry 7. And Palm’s demise came about partially from requiring the loyal PalmOS user base to move up to WebOS (although Palm had several other problems that condemned it). You could probably include Symbian and some others in this discussion as well.

So, what’s the bottom line? The innovation curve is real and affects all products. But the hyper-inflation of new products categories seems to make people forget this. We will see a slowing in the amount of innovation of products over time as they fall into the legacy trap. And this will include the most popular products that seem to have unlimited potential.

Of course, this will only hold until the next new innovation cycle begins, and no one really knows what, or when, that might be.

iPad Mini, Surface photos: Devindra Hardawar/VentureBeat

Microsoft will ring in the new year by opening six new retail locations that will help customers get better exposure to products such as its Surface tablet and Windows Phone devices, the company announced today.

In a clear mimicking of Apple’s retail strategy, Microsoft opened 51 “full-line” (large retail locations) and “specialty” stores in 2012. With electronics shops like Best Buy and RadioShack closing stores, it’s important for Microsoft, like Apple, to educate folks about its products and partner products.

The new shops could help educate customers about its still-new Windows 8 operating system, various Windows Phone 8 smartphones, and Microsoft Surface tablets running Windows RT and Windows 8.

The six new Microsoft retail locations will be at:

• The Shops at La Cantera, San Antonio, Texas
• Dadeland Mall, Miami, Fla.
• Beachwood Place, Beachwood, Ohio
• Westfield San Francisco Centre, San Francisco
• City Creek Center, Salt Lake City
• St. Louis Galleria, St. Louis

Microsoft said it expects to open “many” other stores in the near future as well.

We’ve had questionable experiences with Microsoft’s retail store in Austin, Tex., but we realize there are other stores around the country where people might be more friendly.

Microsoft Store via Rob Stinnett/Flickr

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Microsoft’s Surface rollout is about to get a big, fat, belated boost.

Microsoft announced today that it plans to expand the tablet’s availability to retailers like Staples in next few days. So far, the Surface has only been available at Microsoft’s online and retail stores, which probably didn’t help its sales numbers very much. Microsoft only has 32 retail stores worldwide (30 of which are in the U.S.), though it did open up a handful of pop-up stores to pimp the Surface.

While Microsoft’s initial (and dumbfounding)  plan was to delay the Surface expansion until early next year, the company is clearly coming to its senses by making that move during the holiday season and not after it.

Will the move boost the device’s sales? It’s tough to see how it can’t. Last month Microsoft CEO Steve Ballmer said that sales of the Surface had so far been pretty modest, but that was only because of the device’s relatively tiny availability. “Soon we will be further present in more countries and stores and that’s when discussing numbers will make the most sense,” he said.

Now that the Surface is only days away from wider availability, it’s very likely that those sales will pick up —  or at least Microsoft hopes they do. Though given our review experience with the Surface, you may want to hold off until the next version.

Update: Best Buy and Staples have confirmed that they’ll be selling the Surface RT on December 12.

Photo: Devindra Hardawar/VentureBeat

The 64 gigabyte Surface Pro (as it’s commonly called) will run you $900 for the 64-gigabyte version, and $1,000 for the 128 GB model, Microsoft announced today. Both will be available in January and will come with a Surface Pen. Unfortunately, the pricing doesn’t include a Surface Touch Cover or Type Cover, which will cost an additional $120 and $130, respectively.

Unlike the Surface RT, which can only run new apps from the Windows 8 Store thanks to its ARM processor, the Surface Pro is no different than a typical Windows 8 laptop. It sports a Core i5 Intel processor, allowing it to run existing software for Windows 7 and prior versions of the OS. It also sports a high-resolution 1080p display, a USB 3.0 port, and the same kickstand found in the Surface RT.

You’ll pay a slight weight cost for the Surface Pro’s versatility: It weighs about 2 pounds, compared to the Surface RT’s 1.5 pounds, and it’s slightly thicker. It also costs almost twice as much as the Surface RT, which starts at $500 (or $600 for the model that includes a Touch Cover). The difference, of course, is that the Surface Pro is a fully functional computer, unlike the slightly gimped Surface RT.

Compared to other Ultrabooks and ultraportables, the Surface RT has quite a bit going for it. It’s lighter than the 11-inch MacBook Air, has a higher resolution screen, and is priced about the same. We’ve seen some interesting Windows 8 Ultrabooks like the Lenovo IdeaPad Yoga and HP’s Envy x2 hybrid, but the Surface’s unique design and keyboard covers makes it more intriguing.

Given that most of my frustrations around the Surface RT stemmed from its slow ARM processor and limited apps, I’m looking forward to testing out the Surface Pro. It could just be that no compromise computer of the future I’ve been waiting for.

Update: It looks like the Surface Pro will have around half of the Surface RT’s battery life — which should put the Pro at around 4 hours — according to the official Surface Twitter account.

@SethAbels Hi there! We expect Surface with Windows 8 Pro to have approximately half the battery life of Surface with Windows RT.—
Surface (@surface) November 29, 2012

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Oprah tweeting about how much she loves the Microsoft Surface is no surprise — she has recently endorsed the Windows-based product, calling it the “Mercedes Benz” of tablets.

But to publish that tweet using an Apple iPad? Well, it doesn’t show a lot of conviction.

Gotta say love that SURFACE! Have bought 12 already for Christmas gifts. #FavoriteThings—
Oprah Winfrey (@Oprah) November 19, 2012

“Gotta say love that SURFACE! Have bought 12 already for Christmas gifts,” Oprah tweeted on Nov. 18. (Must be nice to be a billionaire, I thought, to be able to buy $500 tablets by the case.)

While Twitter’s web interface and official Twitter clients no longer show which app someone used to send a tweet, that data is still available, and some clients show it. For instance, Twitter client YoruFukurou (screenshot to the right) shows the tool used to send Oprah’s tweet:

“from Twitter for iPad”

Now, it’s entirely possible that a celebrity like Oprah doesn’t send the majority of her own tweets. This one, in particular, was probably sent by a staffer — since it’s no doubt tied to a commercial agreement Oprah has with Microsoft to promote the Surface.

Still, that’s not exactly a confidence-boosting endorsement. It’s a bit like driving around town with a bullhorn advertising the Mercedes dealership — while you’re driving a Lexus.

Via Cult of Mac and Zagg (we’re not sure who got it first)

If you’re like many managers, you yearn for a simple “dashboard” that can tell you everything you need to know about your business at a glance.

Well, you can stop yearning and start earning. Microsoft chief executive Steve Ballmer has a surprising solution, and it’s called the Windows 8 Start Screen.

“I’ve got news feeds, stock feeds, twitter feeds, all going past on the screen, and if something catches my interest, boom, I dive in immediately, because it’s alive with the activity that’s important to me,” Ballmer said yesterday, at a Silicon Valley event where he appeared onstage with LinkedIn founder Reid Hoffman.

Ballmer was bullish on Windows 8′s prospects, especially among business users, and downplayed the much-criticized disappearance of the Start button in favor of Windows 8′s new, touch-centric Start Screen. Of course, you’d expect that from Microsoft’s evangelist-in-chief: He wants to sell as many copies of Windows 8 as possible. But the digital dashboard angle was a new one.

“People say, ‘Is there some adjustment because the UI is different?’ and the answer is, there’s some. If you want to live in the desktop, you pretty much can. And yet what we find is people are far more interested than they thought they would be in the generation of new applications, and particularly our Start screen, as this kind of … digital dashboard.”

The Start Screen’s “Live Tiles” might fall short of the kind of detailed data you’d expect from a true enterprise dashboard. But the tiles can offer all kinds of up-to-the-second data from the apps behind them, and programmers can customize those apps to deliver the kinds of information most relevant to users. If someone sees an interesting tidbit, stock quote, or chart on a live tile, they can click on the tile to launch the app and get a more detailed look. For in-house corporate developers, the possibilities may be richer than you’d expect.

Ballmer described a recent meeting with the CEO of one of the world’s largest banks.

“I popped open the machine and showed it to him. And he was like, ‘Oh! You mean in the bank branches, we could put like 5 live tiles up with all the information that the manager needs about what’s going on in the store, and they could just click on it and get more data, would that be OK?’

“And I said, ‘Yeah, baby, let’s rock and roll!’”

Ballmer said the CEO signed up to do a deployment of Windows 8 across all of the bank’s branches.

“I’m very excited,” Ballmer said, no doubt counting up the license fees that will soon be rolling in. “And they’ve got a lot of branches, so I’m particularly excited.”

“At the end of the day, what people want is information at a glance, and there’s a lot in Windows 8 from the consumer perspective. But there’s a lot of ability for businesses to put front ends on their apps that make these systems alive with the activity that people need to know,” Ballmer concluded. “Plant floors, bank branches, call centers, you name it — it’s valuable.”

Photo of Steve Ballmer: Dylan Tweney/VentureBeat

Slow. Kludgey. Expensive. This is how HP PC head Todd Bradley describes Microsoft’s Surface tablet, which he isn’t too crazy about.

“Holistically, the press has made a bigger deal out of Surface than what the world has chosen to believe,” Bradley said in an interview with Citeworld.

These are some pretty damming words coming from an executive of one of Microsoft’s most significant hardware partners. HP so far has been fairly measured with its reaction to the Suface.

“I believe Microsoft was basically making a leadership statement and showing what’s possible in the tablet space,” HP printing vice president John Solomon said back in August. In other words, the Surface is a model, not competition.

Bradley, on the other hand, says that the Surface isn’t competition because Microsoft is keeping the device’s distribution pretty low — at least at first.

The short of it is this: HP may not see the Surface as competition, but there’s no doubt consumers will be choosing between the Surface and HP computers. That’s unavoidable.

As far as tablets go, don’t expect another consumer tablet from HP anytime soon. Bradley says HP is taking it slow on that front, which isn’t too surprising considering that the whole TouchPad fiasco is still fresh in everyone’s minds.

There are no hard feelings between Steve Ballmer and recently-departed Windows 8 head Steven Sinofsky.

In fact, the Microsoft chief executive gave him an enthusiastic thumbs-up tonight onstage, in a discussion with LinkedIn founder Reid Hoffman.

“Steve has made one of the most amazing contributions anyone has ever made — to any company,” Ballmer said and encouraged anyone who needed a powerful, innovative executive to hire him.

He referred to Sinofsky’s replacements, Julie Larson-Green and Tami Reller, without mentioning their names, as very capable ladies despite their lower profiles.

That ebullience perhaps masks the behind-the-scenes maneuvering that led to Sinofsky’s departure. Reports have speculated that Sinofsky left when it became clear he was not going to be designated successor to Ballmer as CEO.

Or, it might be genuine. Ballmer might be perfectly happy to let Sinofsky — who could be a demanding and polarizing manager — go earn his CEO stripes somewhere else before recruiting him back to run Microsoft in a few years, when Ballmer is finally ready to retire.

Photo of Steven Sinofsky by James Pickover/VentureBeat

Well, we didn’t see this one coming: Microsoft Windows head Steven Sinofsky is leaving the company, effective immediately, the company announced today.

In his stead, Microsoft is appointing Julie Larson-Green, who led program management for Windows 7 and Windows 8, as head of Windows software and hardware engineering. Microsoft chief financial officer and chief marketing officer Tami Reller, who’s now one very busy lady, will take over the business side of Windows. Both will report to Microsoft chief executive Steve Ballmer.

“It is impossible to count the blessings I have received over my years at Microsoft. I am humbled by the professionalism and generosity of everyone I have had the good fortune to work with at this awesome company,” Sinofsky said in a statement today.

The news was first reported by All Things Digital several minutes before Microsoft released its official announcement.

Sinofsky was Microsoft’s front-man for both Windows 8 and its Surface tablet, and his departure comes as a shock given that the launches for both products have gone off without a hitch. With Windows 8, he had the almost impossible task of convincing us that Microsoft has finally figured out a way to make Windows work on tablets, and he had an even bigger challenge pushing Surface tablet, Microsoft’s first computer.

“I am grateful for the many years of work that Steven has contributed to the company,” Microsoft said in a statement. “The products and services we have delivered to the market in the past few months mark the launch of a new era at Microsoft…”

Not surprisingly, Microsoft’s announcement makes it seem like Sinofsky’s departure was mutual. But AllThingsD reports that there was also growing conflict between Sinofsky and other Microsoft executives. (If this story sounds familiar, it’s because Apple’s iOS head Scott Forstall got booted for practically the same reason.)

Update: Owen Thomas over at Business Insider reports on another possible reason for Sinofsky’s move: He wanted Steve Ballmer’s job. As someone who knew the ins and outs of managing both Office and Windows, Sinofsky was long thought of as a potential candidate to replace Ballmer as CEO.

Source: Sean Ludwig

Julie Larson-Green

But just because Sinofsky is out, it doesn’t mean that Microsoft’s grand plan with Windows 8 is slowing down. After the Windows Vista debacle, Larson-Green was the one who pushed the Windows team to work together. She was one of the big reasons Windows 7 ended up being such a solid operating system (when last have you heard anyone complain about it?). She had an even bigger role with Windows 8 and its sibling, Windows RT, as head of the Windows program.

VentureBeat’s Sean Ludwig and I had a chance to chat with Larson-Green at Microsoft’s Windows 8 launch event in NYC (after Sinofsky ran away from our camera). Check out our interview, where she wasn’t afraid of bringing up the controversy around Windows 8′s new interface, below.

Photo: James Pikover/VentureBeat

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

How’s the Surface tablet been faring in its first few weeks of life? According to Microsoft CEO Steve Ballmer, not badly at all.

Speaking to France’s Le Parisen, Baller said that reception to the Surface has so far been pretty good, even despite its relatively modest rollout. Microsoft primarily offers the Surface online and in stores, so sales of the device are bound to be on the low side until it ramps things up.

“Soon we will be further present in more countries and stores and that’s when discussing numbers will make the most sense,” Ballmer said.

All of that bodes well for the Surface, but it’s Ballmer’s use of “modest” that’s gotten most of the attention. Some news outlets took the word to be referring not to the device’s rollout, but rather to its sales — a confusion Microsoft has been quick to correct.

“While our approach has been modest, Steve notes the reception to the device has been ‘fantastic’ which is why he also stated that ‘soon, it will be available in more countries and in more stores,’” Microsoft said in a statement.

Translation: Yes, Surface sales have been low, but it’s not because people don’t want to buy it.

What’s funny about the situation is that it sounds a whole lot like the one that Samsung faced last year when confusion arose between the use of “quite small” and “quite smooth” in reference to the sales of the Galaxy Tab.

Dicey things, these sales numbers.

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Dear Windows Phone 8,

I want to love you, but there’s something coming between us.

When we first met, you were just version 7, but you impressed me. I liked how your home screen showed me all kind of nice things, like gentle reminders about my next appointment or photos of my Facebook friends. I liked the way that your photos app was always showing me new pictures of my niece. Something about the way your tiles flipped into place just made me smile.

I was so won over by your charms that I was even willing to go back to AT&T, a company that’s let me down many times in the past, for your sake. I took the big step and signed a two-year contract to get a Lumia 900, which was the flagship Windows phone last summer. It wasn’t your most flattering phone, but I will say it was impressive in almost every way: Fast. Big screen. Bright colors. And fun to use.

Besides, it was made by Nokia, a company I’ve always admired for its workmanship, for its well-designed and reliable devices.

But then something went wrong. One morning the Lumia 900 just didn’t wake up. I had plugged it in to charge overnight, but it just wouldn’t boot up, no matter what I did.

I went without a phone that day. Fortunately, I use Google Voice as my mobile contact number, so I could still get calls on my computer, even without a phone. When I got to the AT&T store that afternoon, they told me they’d seen this happen a few times but that they couldn’t do anything to fix it. They gave me a new Lumia 900.

I entered my Live.com information and signed in. There you were again: My Windows Phone OS. Except something was missing. My Live.com account included connections to Twitter and Facebook, so those contacts reappeared right away. But all of the groups of friends and family members I had created? Gone. I had to re-create each group, one contact at a time. Ringtones, music, and all the apps I’d downloaded? Also missing.

So I re-created the groups, re-installed my apps, got my music and favorite photos back onto the new handset. Everything went smoothly then for a week or two. But then it happened again: One evening, the Lumia locked up and just wouldn’t wake up. I couldn’t power it back on. Even after recharging it all night, it still wouldn’t work.

Back to the AT&T store I went. They replaced my phone again, after a short half-hour wait. Once again, I had to re-create my Google accounts, contact groups, apps, and such. Fortunately, I’d remembered to check the option to sync all the photos I took to Skydrive. Thank goodness for that.

At this point I was growing quite a bit less enchanted with you, Windows Phone. I mean, I still liked you. But reintroducing myself to you every time I got a new phone was getting tiring. Why couldn’t you just remember all the things about me, like my apps, my ringtones, all my contacts, and email accounts?

So things puttered along for a month. And then it happened again. One fateful morning, the Lumia did exactly the same thing again: It wouldn’t wake up.

Back to the store I went. This time, I begged them to give me a phone — any phone — so long as it worked reliably. So the nice AT&T representative handed me an Android phone, an HTC Vivid. I’ve used Android phones for several years, before I met you, so this was an easy transition, even if it wasn’t the phone of my dreams.

But here’s the thing. It’s three months later. I’ve seen your new style, Windows Phone 8, and I like a lot of things about you. I’ve spent some time with you on the confusingly named HTC Windows Phone 8X, which is a terrific phone: It’s super-slim, attractive, fast, and has a battery that goes for days. I like it a lot.

If I weren’t already an AT&T customer, I’d be happy to give you another try on the Windows Phone 8X, which will be offered to AT&T customers soon for $99 plus a two-year contract. That seems like a good deal. Except I’m not eligible for it. Because I signed on with a two-year contract for a subsidized phone, and that phone is now my HTC Vivid, I’m stuck until October of next year, it appears.

Even if I still had that Lumia 900, I still wouldn’t get Windows Phone 8, because none of the older models are upgradeable.

I’ve talked to AT&T. I’ve begged, pleaded, and spoken to supervisors. But no one is budging. I signed a two-year commitment to get to you, but what I got, in reality, was AT&T — because that’s the way subsidized contracts work in the U.S.

So, Windows Phone 8, I’ve got to break it to you: AT&T is not your friend. It’s what’s keeping me from you right now.

For that matter, Verizon probably isn’t your friend either. I’m not sure there’s a carrier in the country that will put you first, not when iPhones sell so quickly and Android phones come so cheaply. And that’s a problem.

Since you’re coming from way behind iOS and Android, you’re going to need all the friends you can get. I don’t know where you’re going to find them. Big companies that want to standardize on Windows? People like me who are bored and annoyed with Android? They all seem like a stretch.

Your best best, in all likelihood, is Windows 8, which promises to link you with tablets and PCs in one, consistent interface, all sewn together with the surprisingly useful Skydrive service. For your sake, let’s hope that works, because right now, you need a lot of help.

A pretty face that makes people smile is a good start, but it’s not enough.

Photo credit: Karen Jensen, for VentureBeat

iSuppli estimates that Microsoft’s 32 GB Surface RT tablet costs $284 to build. At a retail price of $599, that’s a markup of 111 percent, with a gross margin of 52 percent … and a profit of $312. Apple’s iPad, on the other hand, typically has profit margins in the 40-50 percent range.

The 16GB iPad mini, for example, sells for $329 and costs about $188 to build, yielding a markup of 75 percent, a gross margin of 43 percent, and a profit of $141.

So, theoretically, Surface tablets could be more profitable for Microsoft than iPads for Apple. The key word here is theoretically.

The hardware costs alone of a device are only a fraction of the actual costs, which include research and development, software development, marketing, and much more. Apple, having sold 100 million iPads to date and well over 200 million iPhones, can amortize its costs over far more devices than Microsoft, which is hoping to sell three million in its first year.

It is interesting to see iSuppli’s list of the most expensive parts in the Surface RT:

The touchscreen display is the biggest cost driver at over $100. That’s a shocking price, as it’s not even a high-def screen — the iPad3′s larger retina display cost $127 almost seven months ago. After that, is the Flash and DRAM memory, and the processor itself, an Nvidia Tegra3.

But is the Surface really more profitable than the iPad? In a word, no.

Even if it does make a good headline.

photo credit: squirrel83 via photopin cc

Even before Microsoft officially unveiled its Surface tablets, we caught wind of technical specs from a 7-inch gaming tablet called Xbox Surface. Now it appears Microsoft is actually beginning to plan the hardware for the Xbox Surface, reports Tom Warren at the Verge.

Sources tell Warren that the initial leaked specs for the Xbox Surface were accurate, including a 7-inch display running at a 1280 by 720 (720p HD) resolution. But he also notes that the Xbox Surface will include a custom ARM processor and speedy RAM. The initial specs we saw in June called for dual IBM Power PC processors and 5GB of DDR3 RAM.

Microsoft is also keeping the door open for an unannounced Intel processor.

Warren notes that the Xbox Surface is being developed to be architecture agnostic, so Microsoft could potentially go with one of several CPU options. The tablet will be able to perform simple tablet functions like messaging and web browsing, but it won’t run a full version of Windows.

If the spec rumors are true, it’s clear that Microsoft is building the first-ever gaming tablet with the Xbox Surface. The latest-generation iPad and recent Android tablets feature speedy processors and graphics as well, but they’re also built to perform tasks other than gaming. By fine-tuning a tablet for gaming purposes, Microsoft will have something truly unique — and it’ll also be able to tie in the tablet directly with a future “Xbox 720″ console.

Production for the Xbox Surface will be separated from Microsoft’s traditional hardware partners, like Foxconn and Pegatron, Warren says. He’s also heard that the Xbox Surface is being partially developed at Microsoft’s Silicon Valley offices.

Photo: Microsoft’s existing Surface tablet disassembled, by James Pikover/VentureBeat

These days, the best gadgets on the market are all aiming at the same lofty goal: no compromises. Consider the most recent MacBook Pros, Sony’s NEX lineup of cameras (and similar mirrorless shooters), or Jawbone’s fantastic Jambox Big wireless speaker: These devices may have their minor flaws, but for the most part they work so well that you practically feel empowered by their capabilities.

Without compromises, these devices feel as if they were formed purely to accomplish a specific task well and never get in your way. In the end, isn’t that the the entire point of good technology?

From the moment Microsoft debuted the Surface tablet back in July, it’s seemed like the ideal no-compromise device. It’s far thinner than any ultraportable laptop could hope to be, and, with the innovative Touch and Type covers, it also has the potential to be a more productive tablet than Apple’s iPad (or any other tablet, for that matter). The Surface is also the best device in which to introduce Windows 8 and its newfangled touch interface to the world.

For all of these reasons, the Surface seemed like a major step towards the future of computing, and not just Microsoft’s attempt to copy the iPad. Unfortunately, the reality doesn’t live up to the Surface’s no-compromise promise.

After testing out the Surface (starting at $499, $599 with a touch cover) for almost a week, I found a lot to like about Microsoft’s first computer. But the heavy weight of compromise keeps it from living up to its massive potential as a revolutionary device.

The good: Microsoft’s best-designed product ever

The Surface is Microsoft’s first attempt at building its own computer — but you wouldn’t know that at first glance. With its solid construction, attractive lines, and satisfying “thunk” when popping out its kickstand, the Surface feels like the Windows PC equivalent of a luxury car. The Surface has an Apple-esque level of obsessive design. For example, that wonderful kickstand sound didn’t happen by accident; it required a custom hinge.

But Microsoft also manages to make its design noticeably different from Apple’s. After all, a device as important as this shouldn’t be easily mistaken for an iPad.

The Surface’s case is made out of a metal Microsoft calls VaporMG, which is incredibly durable while being three times lighter than aluminum, it says. VaporMG comes from a magnesium alloy, and it feels almost alien in your hands. It’s cool to the touch and will instantly make you forget any plastic Android tablet you’ve ever felt.

Windows 8 made real

In several ways, the Surface is Microsoft’s Windows 8 vision manifested in an actual piece of hardware. Its boxy design and bright keyboard covers evoke Windows 8’s expressive Live Tiles. The Surface eschews the friendly curves of the iPad. It’s all flat shapes and straight lines — it’s all “serious business.” And of course, it sits halfway between tablets and traditional laptops, the same line that Windows 8 straddles.

It’s tough to understand what Microsoft is getting at with Windows 8 when you upgrade your current laptop or desktop. A mouse and keyboard, or an older touchpad, simply doesn’t give you the same experience as a touchscreen. But with the Surface, the entire thought process behind Windows 8 just clicks (yes, like the lovely kickstand).

We had plenty of nice things to say about Windows 8 in our review, but the Surface actually runs a stripped-down version of the OS called Windows RT, which is for devices running mobile ARM processors. The two operating systems look essentially the same, but one big difference with RT is that you can’t run older Windows applications. Given the paucity of apps in the Windows Store, that could prove a problem for many consumers.

Microsoft will also release the Surface Pro in the next few months, which will be heavier and more expensive (no pricing details have been revealed yet), but it will have more horsepower and will run older Windows programs.

Who needs a cover when you can have a keyboard?

While it’s an intriguing device on its own, the Surface feels half-complete without one of the covers, which double as keyboards when unfolded. As a standalone tablet, a great deal is working against the Surface (more on that below). But as a device that can swap between being a tablet and laptop easily, it’s a wonder.

The Touch Cover ($120), which is touch-sensitive and doesn’t have real keys, feels remarkably thin and light at just 3.25 millimeters thick and 0.46 pounds. It’s basically like trying to touch-type on a flat table: It’s tricky at first, but you’ll get the hang of it quickly. Without the Touch Cover, the Surface would simply be yet another me-too tablet. With it, the Surface feels like it comes from the future, which is exactly the emotion Microsoft wants to convey.

You’ll either love or hate the bolder color choices for the Touch Cover — cyan, magenta, and red (which looks more tangerine to me) — but it also has plain white and black variants if you want something subtler. The bright colors make the Surface stand out when sitting next to an iPad equipped with Apple’s Smart Case, something that I’m sure wasn’t accidental.

The Type Cover ($130), on the other hand, feels as good as any laptop’s keyboard I’ve ever used, including the MacBook Air. Since it features real keys, typing on it has less of a learning curve, and it quickly became my preferred Surface cover. It’s a bit thicker than the Touch Cover at 6 millimeters, and it’s a tenth of a pound heavier, but these are minor sacrifices for superior typing. (You also give up some of the futuristic vibe with the Type Cover, but it’s tough to complain when it feels so good.)

Both covers attach to the Surface magnetically with ease — I found it even simpler than attaching the iPad’s Smart Cover, and you hear a satisfying “Click” once the covers attach properly. Both also feature rudimentary touchpads, which was frustrating to use on the Touch Cover and adequate on the Type Cover. For the most part, you’ll be touching the screen to navigate the Surface, but I still found the touchpads necessary to deal with the Windows desktop interface.

Ideal for media

The Surface’s wide 10.6-inch screen is well suited for media. Widescreen movies typically fill the entire screen, and the display’s vibrant color makes photos shine. It’s nowhere near as sharp as the iPad’s Retina Display, but for most consumers it’ll do just fine. The Surface also sounds better than most tablets thanks to surprisingly loud stereo speakers.

At all of its prices, the Surface comes with about twice the memory of the iPad. That gives you plenty more room to store music and movies, in addition to all the media you’ll inevitably stream, as well as whatever the OS and apps take up, which is significant. I tested the 64 GB version of the Surface, and with only a few additional apps installed, I had just 42.3 GB free. The amount of free space will certainly be much lower if you get the 32 GB entry-level model.

You can also expand the Surface’s memory with tiny MicroSDXC cards, which are available in sizes up to 128 GB, and you can swap these in and out while the tablet is running. (The storage cards fit into an ingenious nook underneath the Surface’s kickstand — as if nothing should mar its beautiful exterior.)

Windows head Steven Sinofsky seems surprised by his Surface. (Photo: James Pikover)

The Bad: Compromise abounds

You’d think that with a quad-core Nvidia Tegra 3 processor and 2 GB of RAM, the Surface would be ready to run Windows RT without much of a sweat. That’s true for the most part: navigating around the Start screen, launching apps, and jumping through multiple open programs generally felt silky smooth.

But things begin to slow down once you have too many apps open. And so, the compromises begin.

2 GB of RAM? What is this, 2005?

“Apps don’t slow down Surface, so you don’t need to close them,” Microsoft boasts on the Surface’s website. But in my experience, that wasn’t exactly true. Running several apps at once caused noticeable slowdown when playing games, switching between apps, or dealing with media. I often had to close Windows 8 apps entirely to reclaim some precious memory (within an app, you do this by swiping from the top of the screen to the bottom). Things get even more troublesome if you’re running multiple Office applications and Internet Explorer in the Desktop.

The Surface also has a hard time navigating Flash and video content on the web. It typically stutters a few times before playing a YouTube video, and the video itself usually takes a few seconds before it begins to play smoothly.

For the most part, I blame the Surface’s paltry RAM for the slowdowns. While 2 GB is a healthy amount of memory for most tablets, it’s fairly minimal for Windows PCs. Even with the memory optimizations made for Windows RT, it often feels like the Surface is gasping for breathing room. With multiple Internet Explorer tabs, Word, and several Windows 8 applications running at once, the Surface’s memory usage would often exceed 80 percent. Things could get better as Microsoft further optimizes the Surface’s firmware and Windows RT, but for now I’m left wishing that Microsoft pushed for 4 GB of RAM (like in the Surface Pro).

If anything, the memory limitations reveal exactly who Microsoft is aiming at with the Surface: A typical consumer who wants the convenience of a readily accessible keyboard but who doesn’t really do all that much at once. For geeks and power users, the Surface Pro is where it’s at.

Pretty but awkward

Despite the overall excellence of the Surface’s hardware, I still found some things to be annoying. For one, at 1.5 pounds with a widescreen display, the Surface is almost impossible to use with one hand for very long. I’ve never been a big fan of large tablets, but the Surface feels egregiously awkward in one hand, no matter how you hold it. Instead of being a convenient handheld computer, I mostly rested the Surface on my leg in tablet mode.

And then there’s the kickstand. I love the design, but it’s not very stable when used on your lap or any non-flat surface. I don’t think we should ever have to worry about balancing our computers on our laps — that’s something notebook makers pretty much mastered several years ago.

Slow down there, fast typer

As much as I liked the design and theory behind the Surface’s covers, actually using them to type for prolonged periods was a major headache. Both the Touch and Type keyboards would often miss characters, and sometimes entire words, if I typed too quickly. If I slowed down to about half my typing speed, things generally worked fine.

Apparently, Microsoft is aware of this issue, and I’ve been told a software fix is coming soon. (If it were a hardware issue, the Surface would be doomed.) But it doesn’t make the best first impression for a device that’s supposed to represent the future of computing. Heck, even DOS on a 386 was able to keep up with speedy typing!

Windows RT: A decent, but barren, start

While Windows 8 is getting most of the hype right now, it’s Windows RT that may truly determine Microsoft’s future. It’s the first version of Windows built for a chip architecture outside of x86 processors, so it won’t run on Intel or AMD chips. And due to its lightweight nature, Windows RT could potentially run on devices with very compact and low-power CPUs, which could enable those devices to be even smaller and thinner than the Surface.

But as it stands now, Windows RT still needs to grow quite a bit before I’m satisfied with it. It takes the Surface around 25 seconds to boot to the login screen, compared to about 10 seconds on my Windows 7 desktop and around 8 seconds on my MacBook Air.

And then you’ve got the app problem.

Since Windows 8 and RT are still very young, it has a notable lack of good apps in the Windows Store, especially from major companies like Twitter and Facebook. In comparison, the iPad now has more than 275,000 apps, and it can also run (albeit in an ugly, blown-up screen) every other iOS app.

This will certainly change over time, but for now the Surface’s app deficiency is going to just disappoint and confuse consumers. (It’s also one of the reasons I think this week’s Build developer conference is the most important event Microsoft has ever run.)

Microsoft certainly has its work cut out for it with developers. We heard from Facebook that it’s waiting on Microsoft to build a Windows 8 Facebook app — clearly it’s not a priority for the social networking giant.

What’s truly strange about Windows RT is that, even though it’s dependent on new Windows Store apps, it still features a traditional Windows desktop. So far, you can use Internet Explorer and some touch-friendly Office apps in the desktop environment. But try to install any other Windows application, which I’m sure many consumers will, and you’ll get an error message.

Aside from helping out occasionally with multitasking, the Windows desktop on the Surface mostly feels like an oddity, like a vestigial tail inexplicably forgotten by evolution.

Windows head Steven Sinofsky turned a Surface into a skateboard. (Photo: Sean Ludwig)

The Verdict: Look, adore — but don’t buy (yet)

The Surface may be our first look at what most PCs will look like in a decade, but as it stands today, it’s more like a concept device. If you’ve ever seen a concept car, you’ll get the idea — the Surface is meant to make an impression, but it isn’t yet ready for consumers.

If I have one major takeaway from the Surface, it’s the surprising revelation that I actually like touching its screen when it’s in laptop form. We’re already seeing some Ultrabooks with touchscreens right now, but eventually it’ll be something that all ultraportable computers (including the MacBook Air) will have to support.

Most of you shouldn’t buy this Surface. Wait for the Surface Pro, or if you can, wait for Microsoft’s next Surface RT model. At the very least, wait for this Surface (and its keyboards) to drop in price and get more apps.

It will only get better, and at some point, the Surface may finally evolve into the no-compromise machine it has the potential to be.

A new gadget, a new naughty teardown from the repair gurus at iFixit.

The iFixit team didn’t waste any time tearing apart Microsoft’s new Surface tablet, which hit stores this past Friday. In my early look at the Surface, I found that it had plenty of personality (but some noticeable issues).

Given the inevitable move towards thinner and more tightly sealed computers — something that’s particularly noticeable in tablets — I didn’t have much hope for the Surface to be easily repairable. IFixit gave it a score of 4 (out of 10) on its repairability scale, which is a bit better than the third-gen iPad’s score of 2, but far below the Kindle Fire HD and Nexus 7′s scores of 7 out of 10.

Among the notable repair issues, iFixit found that it took half an hour just to pry off the plastic bezel around the Surface’s camera. Opening up the Surface also breaks a tamper-resistant label inside the unit, which will obviously void your warranty.

IFixit also noted several repair issues with the Surface’s display: They couldn’t remove the keyboard connector without entirely separating it front the display, and the LCD and glass are fused together (and strongly glued to the case).

“You’ll have to use a heat gun and lots of patience to gain access to the glass and LCD,” IFixit wrote.

But at least the Surface’s battery, even though it was glued in, was “way easier” to remove than the iPad’s.

These repair users won’t affect most users, since they won’t be repairing the Surface on their own, and they likely won’t be taking it to some tiny computer repair outfit. With tablets and tightly sealed computers like the MacBook Air, it’s generally easier to just send in a device to the manufacturer for repair.