Surface tablet buzz starts, Windows 8 hype muted

SEATTLE Sat Oct 27, 2012 9:26am IST

1 of 4. A Microsoft Surface tablet is seen during the launch of Microsoft Windows 8 operating system in Hong Kong October 26, 2012. Microsoft launched its new Windows 8 operating system and Surface tablet in a bid to revive interest in its flagship product.

Credit: Reuters/Bobby Yip

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SEATTLE (Reuters) - U.S. shoppers woke up with mild Surface fever on Friday, lining up in moderate numbers to buy Microsoft's (MSFT.O) groundbreaking tablet computer designed to challenge Apple's iPad.

The global debut of the Windows 8 operating system was greeted with pockets of enthusiasm, but not the mania reserved for some previous Apple Inc (AAPL.O) launches.

Microsoft is positioning the slick new computing device, which runs a limited version of Windows and Office with a thin, click-on keyboard cover, as a perfect combination of PC and tablet that is good for work as well as entertainment.

"I like the flexibility of having the keyboard and the touch capability," said Mike Gipe, 50, who works in sales for bank Barclays, and was planning to buy a Surface tablet at Microsoft's pop-up store in Times Square in New York.

"It's the combination of having the consumer stuff and the work stuff," he said, looking forward to using Excel spreadsheets and PowerPoint presentations on the new device.

The Times Square store was the first to sell the Surface -- Microsoft's first ever own-brand computer -- and other Windows 8 devices late on Thursday and will be open through the holiday shopping season. On Friday morning it was crowded with a mix of tourists and local office workers, but the cash tills were not jammed.

"With the other tablets you're a consumer. With this you can have input," said Peter Townsend, on vacation in New York from Australia with his wife, who bought a Surface tablet because he liked the keyboard.

Mark Pauluch, 28, who works for a New York private equity firm, said he would like a Surface because he does not want to take a laptop on a plane, but was disappointed when the sales representative told him the wifi-only Surface would not work with Cisco VPN networking.

"I can't use this to replace my work laptop unless it supports VPN," he said.

MIDWEST, WEST COAST

Elsewhere in the United States, there was solid but not overwhelming interest for the Surface.

"It's a good tablet. I am not a huge i-anything fan, I like Windows," said Matt Shanahan, a software developer who drove four hours to the tiny Michigan Avenue pop-up store in Chicago from Grand Rapids, Michigan to buy a Surface. "My friend and I are software developers and this gives us an opportunity to develop new apps," he said.

In a pop-up store at the San Francisco Centre mall about 50 people lined up to buy the new Surface.

"On an iPad you have to use half the screen for a keyboard, or buy an accessory. I love that the Surface is so integrated, that you can type and use Word and all my other programs," said Malte von Sehested, a textbook creator who bought a Surface.

"With the Surface you get a steeper learning curve -- I had to get someone to show me how to side-swipe, swipe out to get the menus for instance," he said. "It may take a week, before it all becomes natural. That could be a problem for Microsoft. My old dad, he would get hit by that steeper learning curve."

ANALYSTS PATIENT

Wall Street and tech industry experts failed to show great enthusiasm for Windows 8, but were prepared to give Microsoft time to succeed.

"Microsoft did not come out with Windows 8 thinking it will be an overnight success," said Daniel Ives, an analyst at FBR Capital Markets. "But there's hope that this could be the silver bullet of growth (for Microsoft) as well as giving the PC industry some optimism that there's better days ahead."

The next six to 12 months is a "crucial period" for Microsoft to get traction with consumers, added Ives.

Sarah Rotman Epps, an analyst at tech research firm Forrester, said consumers may be best served waiting for tablets running the full Windows 8 Pro and Intel Corp (INTC.O) chips, which are due out early next year.

"Windows 8 has a lot of great features, but RT has a long way to go," she said, citing a lack of apps and poor video performance on the Surface.

"It's not really a PC. RT is too restricted. Some people will be happier with the full Windows 8," she said.

Microsoft shares were up 33 cents at $28.21 on Nasdaq on Friday. Apple shares were down slightly after disappointing earnings on Thursday. (Reporting By Nivedita Bhattacharjee in Chicago, Sinead Carew and Nicola Leske in New York, Edwin Chan in San Francisco; Editing by Alden Bentley)

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