Microsoft Sees Tablet Shortfall Reversing With New Spring Models

Microsoft Corp. will introduce computers from Hewlett-Packard Co., Acer Inc. and other manufacturers in the next two months, seeking to make up for the dearth of tablets and touch-screen devices that marred the debut of its flagship Windows 8 software.

A Hewlett-Packard Envy series device, doubling as a tablet and laptop, is available for order now at $849.99, while Acer will sell a 10-inch tablet for $499. Asustek Computer Inc.’s convertible tablet weighs just over 1.5 pounds and has two batteries for 19 hours of battery life, according to Aidan Marcuss, principal director at Windows Research.

Chip delays and Microsoft’s restrictions on new hardware meant that the company’s Windows operating system, released on Oct. 26, was featured on a limited number of tablets. Windows 8 was designed to win back customers moving to Apple Inc.’s iPad and tablets with Google Inc.’s Android software, making it critical that Microsoft’s hardware partners offer compelling touch-screen devices.

“I don’t have concerns about awareness, and I don’t have concerns about interest,” Tami Reller, chief financial officer for the Windows unit, said in an interview, when asked about Windows 8 demand. “Now I feel increasingly good about mapping that interest to having those customers find the device they want on the shelf.”

Hewlett-Packard Executive Vice President Todd Bradley last month described Windows 8’s initial sales as slower than many had expected. Microsoft now has 2,000 devices certified for use with the new Windows, double what was available when the operating system was released, Reller said.

New Devices

Another concern at the release in October was the lack of machines with Intel Corp.’s latest low-power chips, code-named Clover Trail. In early December, only two Clover Trail devices were on sale in the U.S., and only low quantities, Marcuss said.

The new machines, targeted at consumers, from Hewlett-Packard, Acer and Asustek all use that chip, which provides a longer battery life.

Lenovo Group Ltd.’s ThinkPad Tablet 2, aimed at business customers with 10 hours of battery life, goes on sale this month for $699. Microsoft is also trying to get cheaper notebooks with touch features into stores since Window 8’s new design is focused around finger swipes and other gestures.

New devices that run on Windows RT, a variant of the operating system that runs on chips with technology from ARM Holdings Plc, won’t be released this spring, Reller said. Microsoft is still focused on getting the five announced in October into stores in large numbers, she said. One partner, Samsung Electronics Co., has opted not to sell its Windows RT tablet in the U.S., she said.

Limited Selection

Qualcomm Inc. Chief Executive Officer Paul Jacobs, whose company makes chips for Windows RT tablets, raised concerns about the limited selection, a result of Microsoft’s restrictions on which manufacturers could make tablet devices for that system, he said. Jacobs said in an interview last week that his company hasn’t been surprised by muted demand for the new Windows, as shown by the chipmaker’s cautious forecast.

“The fact that there were only a handful of manufacturers that were allowed to participate, definitely in my mind held down the competition on form factors and everything that I would have liked to have seen,” Jacobs said.

Jacobs said he’s confident in the long-term opportunity for his chips in computers, and remains committed to investing in the business.

Reller said more Windows 8-based tablets will probably be sold, compared with those running Windows RT.

“We will scale over time, but right now we’re focused on making sure the designs that have been built do have commercial availability and commercial success, and we’ll stay focused on that for the short-term,” said Reller, who declined to provide updated sales numbers.