Microsoft Acknowledges Surface Tablet a Huge Risk

Microsoft has officially acknowledged that its decision to release its very own tablet computer — the Surface – could end in disaster. After all, many of the company’s long-term hardware partners may not be pleased with having to compete with the powerful firm.

Microsoft revealed its concerns about Surface in a document submitted to the U.S. Securities and Exchange Commission.

“Our Surface devices will compete with products made by our OEM partners, which may affect their commitment to our platform,” Microsoft said in the second calendar quarter filing for 2012.

What this means is that Microsoft acknowledges that it’s essentially offending hardware markers — like Dell, Asus, Hewlett-Packard, and Acer – which for years have used Windows as the operating system for the computers they build.

The release of Surface, which is built by Microsoft itself and runs on the Windows 8 OS, could have a dramatic impact on sales of similar devices made by Microsoft’s long-term hardware partners.

It’s difficult to predict how these hardware manufacturers will react to that fact or what impact such a reaction could have on Microsoft business. However, it almost certainly won’t benefit the Redmond, Washington-based firm.

In the end, only Apple may benefit from the decision to produce Surface, since it’s possible a fractured relationship between PC makers will only make the iPad more attractive to consumers.

Microsoft also admitted that tablet computers in general pose a threat to its business, which is primarily based on providing operating systems for desktop and laptop PCs.

“Users may increasingly turn to [tablet devices] to perform functions that would have been performed by personal computers in the past,” the filing noted.

“Even if many users view these devices as complementary to a personal computer, the prevalence of these devices may make it more difficult to attract applications developers to our platforms.”

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