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By IDC Asia/Pacific Personal Systems Research


Microsoft Surface, Asia Awaits

Posted by: Ian Song in Personal Tech @ 2:04 PM

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Ian Song

On June 18th in Los Angeles, Microsoft introduced the Surface tablet family of products. This is the first time Microsoft has ventured into making its own tablet, which will run its upcoming Windows 8 and Windows RT operating systems.

There will be two versions: an ARM-based tablet (Surface for Windows RT) that will run Windows RT and an x86-based tablet (Surface for Windows 8 Pro) that will run Windows 8. The ARM version of the Surface, which utilizes an unnamed Nvidia processor (likely Tegra 3) will become available at the time of Windows 8/RT release around October. The x86 version (Surface Pro) will arrive about three months after the initial Windows 8 release. There was no mention of an Asia/Pacific release date, but given Microsoft's record of releasing Windows 7 as a worldwide product, it could be likely that Surface for Windows RT (Surface RT) will be available in English-based Asian markets with Windows RT's worldwide release, assuming that it has worked out its channel plans.

Effectively two different products, Surface RT and Surface Pro share very similar physical dimensions, as well as the selection of ports. The design of the device is understatedly elegant, functional, and actually quite thin (about 0.1mm thinner than the new iPad). It's obvious that Microsoft wanted to create an integrated experience for the users, starting with the operating system, then the device, and hopefully the ecosystem.

General Observations

Being the latecomer to the party has its advantages: Microsoft had two years to observe Apple and Google battling it out for the tablet space. Microsoft has learned a valuable, free lesson that Google has paid for dearly: a seamless user experience could be more difficult to achieve if an OS vendor relied on OEM partners to make the device. To that end, Microsoft is actually in the lead compared to Google in that Microsoft has taken the first step to announce Microsoft-branded Windows 8/RT tablets while Google has yet to publicly announce its not-so-secretive Nexus tablet.

Although initial impressions of the Surface tablets are good, Microsoft purposefully withheld additional information for the Surface tablets. Specifics on the pricing, battery life, and in-depth hardware configuration were not disclosed. IDC believes that this is a calculated move on Microsoft's part to incite excitement as well as provoke questions to keep interest alive. There is no doubt that Microsoft is all-in on Windows 8/RT and Surface, as shown by the amount of design and innovation that went in to the Surface tablets.

IDC believes that the Surface tablets will stand a good chance of success in the mature Asia/Pacific markets. Despite the lack of transparency on the hardware specs and pricing, what the Surface tablets offer is a true do-it-all device. The Surface could potentially offer an integrated user experience with the function of a full operating system in a compact package for users to not only consume content, but also effectively create content from anywhere. This particular use case, combined with a relatively warm reception towards Windows 8, could persuade early adopters and particularly business users (think: executives that brought iPads to work but couldn't have full access to Office, etc.) to give Surface tablets a try in markets, especially in English-speaking markets like Singapore, Hong Kong, and Australia. Other developing markets may be more price-sensitive. IDC believes that the Surface tablets may not immediately find mass market appeal, especially if it is priced at iPad-levels in these markets.

Surface for Windows RT

Microsoft's strategy of having two Surface tablets is clear; Surface RT is for the consumer market, Surface Pro is for the commercial market. In reality, this strategy won't matter as much. Given the fact that Surface RT will be available first, early adopters will get on the Windows RT bandwagon. Looking back at the iPad, where many early adopters were business users, IDC believes a similar trend might happen here.

Since Windows RT will have the Office suite built-in, as well as a myriad of business apps at launch, the Surface RT is essentially a very powerful business tool from the start. Although the Surface RT isn't compatible with traditional x86-based programs or system management, there are ways around these limitations. Solutions like client virtualization can deliver fully managed corporate Windows XP/7/8 desktop to the Surface RT, which ensures compatibility and security. In a sense, the Surface RT could be the perfect poster child for BYOD, where an employee's personal life resides local with the devices, and his/her professional life exists virtually in the corporate datacenter.

In Asia, addressing BYOD is one of the top priorities of many organizations. In many cases, the extent of BYOD begins and ends with smartphones, but personal tablet usage in the enterprise is on the rise in many developed markets. Organizations are usually wary of supporting personal devices, which could change with Surface RT and its business prowess. If Microsoft does implement a Trusted Platform Module (TPM) in Surface RT, then the device's position in the enterprise is much stronger.

The pure consumer market could be tougher to crack for Surface RT though. The Asia/Pacific tablet market is full of cheap Android devices on the low end and iPads on the high end. This market dynamic leaves Microsoft with little room to maneuver. Microsoft's Windows RT operating system will garner some attention from knowledgeable consumers, but the key to many Asian consumer hearts is through their wallets. Microsoft believes that consumers may be willing to pay a bit more to get a device that runs a full OS, but the truth is that Windows RT is not yet a proven product. If Microsoft wants to establish a beachhead of consumer users in Asia, it will need to focus on key developed markets like Australia, Korea, Hong Kong and Singapore (perhaps even leveraging local music/media acts, etc.), as well as price the Surface RT competitively with the market leader.

Surface for Windows 8 Pro

For Surface Pro, the path to success seems to be less treacherous. It will be one of the best-looking, compact PC/Tablet hybrids.  Microsoft will have more time to position and price it accordingly and it will exist in a space which Microsoft dominated for over 20 years.

As discussed in a previous IDC LINK, Windows 7 adoption across Asia/Pacific has been relatively low compared to other regions. This particular trend may pave the way for Windows 8 Pro, or at least Windows 8 Pro on Surface Pro.  While Surface Pro looks like a great fit for the enterprise on paper, the reality of enterprises buying into Surface Pro is less certain. For one, there isn't nearly enough accessories available for the Surface Pro to be full featured enterprise workhorse (like a docking station). Additionally, the pricing guideline Microsoft announced was that Surface Pro will be priced "in-line" with existing ultrabooks. This means a price range of USD 800 - 1,000 for the device, which may be out of the budget range of many organizations.

Yet, the enterprise centric features of the Surface Pro cannot be denied. The Surface Pro will be one of very few tablet form factor devices that are fully compatible with existing enterprise desktop infrastructure. The manageability, security, and compatibility aspects of the device might be reasons enough for organizations to buy into the device, or at least for the management level employees in efforts to displace the iPads, which can be a nightmare to secure and support.

At the same time, Surface Pro might actually find fans within the consumer market in Asia/Pacific. With much of the population utilizing more public transport and walk more than other regions. This means even a typical 2kg laptop becomes a burden to carry. The Surface Pro, with its relatively light weight and compact design, can serve as a multi-purpose device where consumers may use it as a computer at work, tablet on the bus, and an entertainment device at home.


Microsoft is taking a big risk with a self-branded tablet. It's clear that Microsoft doesn't want to suffer the same fate as Google's Android, having its operating system become so fragmented there is no way to guarantee the user experience. At the same time, Microsoft is heavily dependent on its hardware partners to ensure the success of Windows 8/RT, and this announcement has surely touched more than a few nerves of its partners like Acer, Asus, Dell, HP, etc. Microsoft insisted that all of its partners are aware of Microsoft's intentions, but IDC believes there will be concerns from the partners, from both the tablet and PC side about Microsoft's latest announcement.

The biggest concerns from the partners will be Microsoft's (unfair?) competitive advantage by having full control of the OS, app store and the hardware. Even if Microsoft prices the Surface in-line with other Windows 8/RT devices on the market, it will also collect licensing fees from its partners. Additionally, it will be hard for Microsoft to remain neutral when it comes to software and device updates. As Microsoft will have real time feedback from the customers, it will be able to update/fix issues for the Surface much quicker than partner's devices.

Nevertheless, having Microsoft in the tablet/PC space isn't all bad news its partners. With Microsoft wholeheartedly devoted in the success of Windows 8/RT and the Surface, it's guaranteed that Microsoft is going to invest heavily in marketing Windows 8/RT. The result may be a much bigger interest from the app developers, ecosystem vendors, and therefore consumers. At the end of the day, it will be in Microsoft's best interest to ensure its partners' Windows 8/RT endeavors flourish and the Windows 8/RT platform becomes a major player in the tablet market. Microsoft's involvement in the tablet/PC hardware space will be in effect the rising tide that lifts all boats, including those of Microsoft's partners.

In Asia/Pacific, the Microsoft's channel strategy remains unclear. Unlike the US, there are no Microsoft-owned retail stores in place in the region. While Microsoft may rely on its enterprise sales force to push Surface tablets in the commercial sector, there is no consumer market support at this time. IDC expects Microsoft may start to build other distribution channels for the Surface in Asia as the release date gets near, as well as partner with local and region retailers to sell the Tablets.

With less than six months before Windows 8/RT hits the stores, IDC expects that Microsoft will become more engaging in sharing more information on the Surface tablets. This latest announcement is just another sign that Microsoft has once again becoming an innovative company. Of course, the there are risks associated with innovations, but Microsoft is facing a do-or-die situation, where this may be the last chance it has to claim a piece of the tablet market. And Microsoft has already overcome its biggest challenge: not trying.

To learn more about IDC Asia/PAcific's analysis on Windows 8, please leave comment below, if there are enough interest, IDC will make it available.

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The New Apple iPad in Asia: One Size Does Not Fit All

Posted by: Ian Song in Personal Tech @ 6:09 PM


Ian Song

On March 8th, Apple announced the arrival of its Media Tablet, the “new iPad”, although it will very likely to be referred to, or renamed as iPad 3 once it hit the market. For the first time in iPad history, it will be made available in Australia, Hong Kong, and Singapore on the same date as the U.S. launch, on March 16th, 2012.

Perhaps the biggest feature update in the new iPad is the arrival of Retina display on a tablet device. The new iPad sports a resolution of 2048x1536 on a 9.7 inch, 4:3 aspect ratio screen, by far the highest resolution screen available on a tablet today. The resolution on the new iPad is actually higher than most HD monitors and HDTVs commercially available. Other hardware features on the new iPad includes the new dual-core, Apple branded A5X processor with quad-core GPU, 4G LTE connectivity, and much improved camera.

Interestingly enough, the new iPad’s 4G capability will only be enabled with selected partners in North America for the time being. With so many countries on the initial launch date, customers outside of North America are limited to 3G connectivity. Carriers in the three Asia/Pacific countries on the initial launch list have all introduced LTE enabled devices in their respective markets. It seems that the decision of limiting LTE to North America is business driven rather than due to technical limitations. IDC does expect Apple to release updates in the near future that will enable LTE in the Asia/Pacific region once it finalizes agreements with regional carriers - and when the carriers introduce iPad-specific LTE data plans.

On the software front, Apple has rolled out iOS 5.1 to support the new iPad. Apple has also introduced iPhoto for the iPad, and at the same time updated iMove and iWork to take advantage of the new camera and screen. With the new iPad, Apple now has the complete iLife and iWork suites of products available on its tablet platform.

With the announcement of the new iPad, Apple seems to be repositioning its tablet to become more of a content generating device. Traditionally, Media Tablets live in a grey space between PCs (content generation) and smartphones (content consumption), where it can generate some content, but mostly as a device to consume. The new iPad has the hardware guts and software support to become a more serious threat to full PCs in luring away first time PC buyers as well as PC users looking to replace/upgrade in markets with more affluent consumers. In fact, IDC believes that the upcoming generation of Media Tablets, not just the iPad, could become more capable replacement to traditional PCs, and thus increase the cannibalization effect on PC sales on the consumer market.

While there is no denying that Apple dominates the Media Tablet market, some consumers in the Asia/Pacific region could gravitate toward to more compact-sized iPads, even if the smaller Samsung-based tablets have had limited traction thus far.  This is due how tablets are utilized in many countries here: more consumers use tablets on public transit or while standing up, where the iPad’s relatively bulky size becomes less of an advantage. The Asia/Pacific region represents some of the fastest growing tablet markets in the world, and the new iPad, while impressive, may not always fit Asian consumer lifestyles. It will be interesting if rumors surrounding smaller-sized iOS-based tablets eventually come out to cater to that demographic.

Of course, the arrival of the new iPad means the current generation iPad 2 will become more affordable. However, IDC is doubtful the cheaper iPad 2 will connect with all Asian buyers. Consumers in Asia/Pacific, while price sensitive, could be more likely to buy into the latest technology, in part simply because of its use as a status symbol. At USD$399, the iPad 2 is still priced at a level where arguably superior Android based tablets live, and Apple may find the cheaper iPad 2s less of a hit with consumers once the new iPad becomes available.

Where iPad 2 could succeed in Asia Pacific is the education and public sectors. At a cheaper retail price of USD$399, Apple could potentially make iPad 2s even cheaper by "white-boxing" (or unbranding) them, thus making the tablet more attractive to Asian institutional buyers. Many governments around Asia are actively evaluating bringing tablet solutions into classrooms (Thailand is a good example), which is in line with Apple’s own aspiration of making the iPad an educational tool. iPad is an incredibly sticky solution given the ecosystem support it has. So it may be worth Apple’s while in making iPad 2 a loss leader into Asian institutions.

Another opportunity for iPad 2 would be in the commercial sector, which may be a hit with Asia/Pacific enterprises. At a lower price point, enterprise may be more willing to make tablets available for their employees. Even without the fancy bells and whistles of the new iPad, iPad 2 is still a solid performer in corporate environment, especially when it comes to mobility. In fact, Apple has been able to make headway into the enterprise without much effort on its own. IDC believes that the iPad 2 could potentially break through with many enterprises in the region with applicable use cases, proper management, and a more active local sales force.

Overall, Apple’s new iPad is more evolutionary than revolutionary, despite the impressive advances made. Regardless, the new iPad will be a big hit in the region. With the new iPad becoming available in Australia, Hong Kong and Singapore on March 16th, and Macau a week later, IDC anticipates that the new iPad will be a big grey market item for the rest of Asia - including China. While Apple's current legal battle with ProView may slow down the new iPad's adoption in mainland China, many retailers will nevertheless carry grey market iPads as the profits on the new iPad prove to be too lucrative to pass up.

For the Asia/Pacific markets, Apple could be leaving money on the table by not addressing the potential need to have a more compact iOS-based tablet. Nevertheless, the iPad announcement is a glimpse into Apple’s overall iOS roadmap for 2012. IDC expects that many features in the new iPad will make it into the iPhone 5, which is surely to be announcement later in the year. More importantly, the upcoming iPhone announcement may be Apple’s last chance to bring a larger smartphone (or a smaller tablet) to the market in order to complete its portfolio of iOS devices.

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So Many Client Devices - Is Virtualization The Answer?

Posted by: Bryan Ma in Personal Tech @ 4:14 PM

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Bryan Ma
It's interesting. As I've engaged the industry in our research in the past couple of months, I hear two topics coming up a lot: (1) corporate infrastructure refreshes due to the economic recovery and (2) media tablets like Apple's iPad, as well as of course the iPhone and other competing products. For the former, we're already seeing some signs of business not only replacing aging fleets of PCs, but also some of them in an expansion mode and buying PCs for new hires. For the latter, it's clearly a consumer-focused market, but as we all know, consumers will oftentimes bring these devices to their IT departments in the hopes of being connected to the corporate network.

As we take a step back and look at the big picture, client virtualization enters the picture as a way that these might come together. Businesses will of course still proceed with their traditional PC-based infrastructures as the economy improves, but they also need to account for other ways for employees to access their data on a wide range of devices (including their personally-owned computers at home), and a virtualized client could be one way to address that....in theory, at least.

I say that it's in theory because some of the recent demos that I've seen out here in Asia have failed, citing problems like "unavailable connections," which only reinforced my initial hypothesis that while client virtualization is great in theory, some implementations depend critically on a network connection, which may not always be there. Don't get me wrong - client virtualization has huge benefits and I truly believe that it can be the way of the future, especially with so many consumer devices being brought to the workplace. Technology will improve (and infrastructures will get further built out), so I'm sure that usability will improve significantly in the long run, especially with many organizations in the US already adopting such technology today. In the meantime, I'd be curious to hear if you have any success stories to share - and perhaps more importantly, any best practices or policies that you've used to ensure a good experience for the user and/or IT department.

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The Perfect Recovery: the Economy, Windows 7, and Aging PCs

Posted by: Bryan Ma in Personal Tech @ 11:24 AM

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Bryan Ma

Although the global economy is showing signs of bottoming out, IDC has not necessarily seen huge signs of improved spending on commercial PCs yet. Even in China, where economic signals are arguably better than the rest of the world, most PC purchases are driven by resilient consumers, whereas enterprises continue in a slump.  IDC expects a gradual recovery starting in 2010, and even then, it could take some time for IT managers to get their budgets back.

But there will be a couple of other factors at play in the PC industry during this period, including the launch of Windows 7 at the end of 2009. While IDC again expects consumers to latch on quickly to Windows 7 (in many cases because of a lack of choice), businesses may still take some time before making a move.  Anecdotally speaking, a large number of Asia/Pacific IT managers questioned by IDC in August 2009 suggested that they were only planning to move to Windows 7 when they could be assured that their legacy applications could run effectively.

Still, these entities were running Windows XP, and many of them were carrying along aging fleets of such XP-based machines that inevitably will need to be upgraded. IDC believes that this, along with the idea of an economic recovery in 2010 plus the marketing funds surrounding Windows 7, could evolve into an optimistic scenario of "the Perfect Storm," where three independently moving factors converge into a single, more powerful force that drives corporate PC upgrades in 2010 and onwards.  The stability and increased usability of Windows 7 (not to mention XP Mode for the really stubborn legacy applications) can further help as more IT managers find Windows 7 environments able to support their businesses dependably. IDC has not factored any significant inflection point into its PC forecast to reflect this scenario yet, but should this "Perfect Storm" really develop, then hopefully the market can rebound more quickly than IDC expects.

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