Microsoft Surface fuels fear and loathing in PC land

Tough talk about Microsoft's upcoming tablet is the latest sign of a PC industry in panic mode

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The manufacturers' fear of competition by a partner is fairly obvious, but there's another layer here. Although Microsoft has not yet announced a price for the Surface, the company has indicated it will cost about as much as an Ultrabook, which could mean $900 to $1,000. That sets expectations on the part of the buying public that Windows tablets will be as expensive as iPads or more so.

If the OEMs want to price their tablets more competitively, they'll look like "second-rate also-rans," says O'Donnell. But if they maintain a high price point, they'll need to compete head-on with the iPad. That's a very tough sell, as the makers of Android tablets have learned.

Windows 8 worries
Making all of this even more nerve wracking for Microsoft and its PC partners is anxiety over Windows 8 itself. The new OS has garnered generally poor reviews (to put it mildly) from those who have tried it out on standard PCs. The interface that Microsoft used to call "Metro" simply doesn't work very well on a device that is not touch-enabled, and most PCs are not. Some have even called the Windows 8 experience on the desktop "nauseating."

You might think that Acer CEO Wang was just mouthing off when he made his remark to the Financial Times. But one of his chief lieutenants made a similar statement to the same publication, which makes me think it's corporate policy.

Campbell Kan, Acer's president for personal computer global operations, said the Taiwanese company was debating internally how to respond to the Surface and any further challenges that could arise if Microsoft expands further into hardware. "If Microsoft ... is going to do hardware business, what should we do? Should we still rely on Microsoft, or should we find other alternatives?" Kan said.

I don't like to call people dumb, but that's a really dumb remark. For companies like Acer, there are no alternatives to Windows or to Microsoft. Pretending otherwise is plain foolish. When Windows 8 ships, tens of millions of dollars in co-marketing funds will flow from Microsoft's coffers to the OEMs' grateful hands -- unless guys like Wang and Kan let their mouths write those uncashable big checks.

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