Microsoft Surface The Next Zune?Microsoft Surface The Next Zune?

8 Things Tablets Still Can't Do

Microsoft's Windows 8-powered Surface and Surface Pro tablets will be too pricey and face too much competition to have much impact on the mobile computing market when they launch Oct. 26, according to a research firm.

"The information available to date suggests the prices of both will be too high to capture significant market share, and a direct sales approach will prove inadequate," said Tim Coulling, who watches the the computing market for research firm Canalys.

"We expect the Surface pads to have a similar impact on the PC industry as Zune did in portable music players," said Coulling, referring to Microsoft's ill-fated MP3 player, which it pulled from the market last year.

Zune never was able to dent the iPod's stranglehold on the MP3 market, and Coulling believes Surface will be similarly challenged against another Apple blockbuster--the iPad.

[ Read Will Microsoft Surface Tablet Cost $1,000?. ]

Canalys believes Windows 8 tablets from other vendors also could have a tough time competing unless Microsoft lowers the price. Early reports indicate the tablets that run Windows RT, the version of Windows 8 built to run on mobile ARM chips, could start as high as $500, which is also the entry price for the new iPad and more than twice the price of Amazon's hot-selling Kindle Fire.

Intel-based Windows 8 tablets likely will cost even more.

"Canalys has advised PC vendors (Microsoft's OEMs) to postpone launches of Windows RT pads until Microsoft rethinks the high license fee," the firm said in a report this week. "'Once the Surface puts a material dent in Microsoft's P&L, it will need to repair relationships with vendors, who are already preparing lists of demands," said Canalys' Chris Jones.

Hewlett-Packard, for one, has confirmed that it has no plans to produce Windows 8 RT tablets. Canalys said Microsoft should help OEMs deliver competitively priced slates by subsidizing components costs such as touch screens "to kick start the market."

Windows 8 tablets and PCs hit stores on Oct. 26. Microsoft on Wednesday said the OS has reached the release-to-manufacturing (RTM) stage and is now in the hands of its PC industry partners.

Developers can download the final version of Windows 8 through their MSDN subscriptions, starting Aug. 15. IT departments with Software Assurance for Windows can download Windows 8 Enterprise Edition through the Volume License Center, beginning Aug. 16.

Volume license customers without Software Assurance can purchase Windows 8 from Volume License Resellers, as of Sept. 1.

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