* Software company launches own 'Surface' tablets
* ARM version aimed at iPad, Intel version at Ultrabooks
* No pricing, firm release dates
* Analysts skeptical of success, want details
By Lisa Richwine
LOS ANGELES, June 18 Microsoft Corp
introduced its own line of tablet computers on Monday at a
much-hyped press event in Los Angeles, marking a major strategic
shift for the software giant as it struggles to compete with
Apple Inc and re-invent its aging Windows franchise.
The new tablet line, named Surface, includes a consumer
device aimed directly at the Apple iPad, and another, larger
machine designed to compete with lightweight laptops. Both
include a keyboard that doubles as a cover, and both will be
powered by versions of the new Windows 8 operating system.
The move breaks with Microsoft's operating model of the past
37 years, which has relied on computer manufacturers to make and
market machines running Windows. It could throw the world's
largest software company into direct competition with its
closest hardware partners such as Samsung Electronics Co Ltd
and Hewlett-Packard Co.
However, the success of Apple in recent years has
underscored the benefits of an integrated approach to hardware
and software, and Microsoft Chief Executive Steve Ballmer said
on Monday that the company "didn't want to leave anything
uncovered" as it rolled out Windows 8.
The new software is the biggest overhaul of Windows in
years, and features a new touch-friendly interface dubbed
"Metro". It is scheduled to be available for the Christmas
The lighter, thinner version of the Surface tablet, built on
an Nvidia Corp chip designed by ARM Holdings,
will be the first to market at the same time as the general
release of Windows 8, and will feature Microsoft's popular
Office suite of applications.
It is comparable to Apple's new iPad, heavier but slightly
thinner. It has a 10.6 inch screen and comes in 32GB and 64GB
A second, heavier tablet aimed at the new generation of
lightweight laptops called "ultrabooks", running on traditional
Intel Corp chips, will come in 64GB and 128GB models.
That will be available about three months after the ARM version,
The company gave no details on pricing, except that they
would be competitive with comparable ARM tablets and
Intel-powered Ultrabooks. They will be on sale online and in
Microsoft's new brick-and-mortar stores in the United States.
Microsoft shares rose 0.8 percent in after-hours trading,
making up for a 0.6 percent drop to $29.84 in the regular Nasdaq
Industry watchers were generally impressed by the devices'
specifications, but doubted they were a sure-fire hit.
"I don't see this as an iPad killer, but it has a lot of
potential," said Sarah Rotman Epps, an analyst at tech research
firm Forrester. "This raises more questions than answers. The
story that Microsoft told today was incomplete. They focused on
the hardware innovation but didn't talk about the services, the
unique Microsoft assets that could make this product amazing."
Contrary to expectations, Microsoft made no mention of
integrating content and features from its top-selling Xbox game
console, the Skype video calling service it bought last year, or
Barnes & Noble's Nook e-reader, its new partner in the
electronic books market.
Sales of tablets are expected to triple in the next two
years, topping 180 million a year in 2013, easily outpacing
growth in traditional PCs. Apple has sold 67 million iPads in
two years since launch.
Apple, which makes both hardware and software for greater
control over the performance of the final product, has
revolutionized mobile markets with its smooth, seamless phones
and tablets. Rival Google Inc may experiment with a
similar approach after buying phone maker Motorola Mobility this
Making its own hardware for such an important product is a
departure for Microsoft, which based its success on licensing
its software to other manufacturers, stressing the importance of
"partners" and the Windows "ecosystem."
"The question is why is Microsoft doing it?," said Michael
Silver, an analyst at tech research firm Gartner. "Lack of faith
in the OEMs (computer makers)? There's definite risk here as
Microsoft increasingly competes with its customers."
Microsoft stressed that "OEMs will have cost and feature
parity on Windows 8 and Windows RT," meaning that it would not
hold back any features from other hardware makers' Windows
When it has ventured into hardware, the Redmond,
Washington-based company has had a mixed record.
Apart from keyboards and mice, the Xbox game console was its
first foray into major manufacturing. That is now a successful
business, but only after billions of dollars of investment and
overcoming problems with high rates of faulty units - a problem
which was nicknamed the "red ring of death" by gamers.
The company's Microsoft-branded Zune music player, a late
rival to Apple's iPod, was not a success and its unpopular Kin
phone was taken off the market shortly after introduction.
The company killed off a two-screen, slate-style prototype
of a tablet device called Courier later that year, saying the
technology might emerge in another form later on.