Microsoft's Surface Tablet to Take On The iPad

No date or price yet, but Microsoft enters the hot tablet market.

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Apple has seen this before. 

Microsoft has copied several innovations made famous by Steve Jobs, from the mouse to the intuitive smartphone. Some have modestly succeeded. Others have flopped. 

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The new Surface tablet device Microsoft announced in Los Angeles Monday looks like another me-too product. The dimensions of the Surface will be nearly identical to those of the iPad. It will have a similar touch screen and, if Microsoft is smart, usability that mimics the beloved iPad.

Microsoft is notoriously ham-fisted with computing innovations that go much beyond its core software, and Apple will probably come up with fresh upgrades to the iPad that will secure its place as the market leader in tablets. But Apple can't afford to dismiss Microsoft either, and in this way, Microsoft is doing consumers a huge favor.

The Surface, likely to go on sale later this year, will include several things notoriously missing from the basic iPad, such as a keyboard and a built-in way of propping it up. These features are readily available as aftermarket devices for the iPad, including a slew of add-ons offered by third-party suppliers. But they raise the all-in cost to consumers. And by excluding such things from the iPad's set of standard features, Apple lowers the cost of producing the device, keeping its profit margins high.

That's a typical "first-mover" advantage that goes to firms that introduce breakthrough products. But that advantage will erode as the Microsoft Surface offers more standard features than the current version of the iPad. And Microsoft will no doubt price the Surface to make it seem like a relative bargain.

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Microsoft will address another shortcoming of the iPad by making the Surface compatible with popular Microsoft programs such as Word and Excel. There are plenty of apps for the iPad that allow users to generate documents and crunch numbers, but the Surface could make the process smoother by integrating the required software right into the operating system and eliminating workarounds. The Surface would enjoy another advantage if it came with popular software from other providers, such as Acrobat and Flash from Adobe.

Microsoft could easily bungle its foray into tablets. (Anybody out there own a Windows 7 smartphone?) But it could also transform the whole market. To address the competitive threat, Apple will have to make the iPad even more practical, with more basic features. A keyboard might become standard, or come on certain versions of the iPad. More software will have to be included. Other table competitors, such as Samsung, Sony and Amazon, will stay in the race too, which will help push prices down and capabilities up, just as happens with PCs and laptops.

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Apple has a huge base of loyal fans who will stick with the iPad no matter what. Microsoft, by contrast, is more of a utilitarian firm beloved by hardly anybody. But its entry into the tablet market will help push tablets downmarket, so they're no longer just playthings for people with disposable income.

The same thing has happened in the smartphone market, with Apple's iPhone holding court at the high end, while Google's Android phones and other competitors grab a huge share in the middle. As more models from other competitors enter the market, consumers at both ends of the spectrum win. 

Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.