Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Is Microsoft Corporation (MSFT) Alienating Its Partners with Surface Tablet?

Microsoft Corporation (NASDAQ:MSFT) is jumping into the closed-ecosystem world of Apple, Inc. (NASDAQ:AAPL) by entering the tablet market with its new Surface tablet with the new Windows 8 operating system. So with Microsoft looking to make its own mark in the tablet market, what will happen to the company’s hardware partners, who have been so loyal in installing Windows operating systems into their laptops, desktops and notebooks?

Microsoft Corporation (NASDAQ:MSFT)

Well, as one of those partners say, there seem to be some feelings hurt. J.T. Wang, CEO of Acer Incorporated, one of the prominent hardware partners for Microsoft Corporation (NASDAQ:MSFT), decided recently to fire a shot over the bow of Microsoft when he commented, “We have said [to Microsoft] think it over,” he told the Financial Times. “Think twice. It will create a huge negative impact for the ecosystem and other brands may take a negative reaction. It is not something you are good at so please think twice.”

That does lead to the question – if Microsoft Corporation (NASDAQ:MSFT) is producing its own hardware-software ecosystem to direct compete with Apple, Inc. (NASDAQ:AAPL), then what does happen to the hardware partners of Microsoft? Will Microsoft continue to use them, expandig their Widows 8 universe beyond the limits of what Microsoft can manufacture in its own tablet, or will those companies have to look for other options? There is no definitive word on that – and that could be due to the fact that Microsoft hasn’t introduced its retail price for its tablet. The company has only said it would be “priced competitively.” Whether the price will be competitive with other name brands – like Dell Inc. (NASDAQ:DELL), Hewlett-Packard  Company (NYSE:HPQ) or even Apple, Inc. (NASDAQ:AAPL) – or similarly to “value” brands like Acer or ASUS, remains to be seen.

In the meantime, Microsoft’s partners are looking into other options – which are generally unproven in tablets and laptops – like Linux or Google, Inc. (NASDAQ:GOOG) Chrome operating system, which hasn’t quite caught on as the scaled-up version of the Android OS for smartphones. Maybe inadvertently, Microsoft Corporation (NASDAQ:MSFT) could be setting up a whole new competition for an effective operating system – maybe it will encourages the evolution of Google Chrome or Linux and viable medium-scale (and perhaps cheaper?) alternatives to the iOS or Windows systems.

In the meantime, there is a question whether Microsoft Corporation (NASDAQ:MSFT) will still have these partners if the Surface tablet fails in the market. Who would be willing to install Windows 9?

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.