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Holiday Tablet War Gets Nasty: CEOs of Apple, Amazon And Microsoft Call Out Each Others' Tablets

This Is War! CEOs of Apple, Amazon And Microsoft Call Out Each Others Tablets
Reuters
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By Poornima Gupta and Alistair Barr

SAN FRANCISCO (Reuters) - The biggest names in consumer technology, stung by a string of disappointing quarterly results this month, are suiting up for what's shaping to be the fiercest holiday battle in years.

Investors and consumers have already largely written off flaccid quarterly numbers from tech behemoths like Microsoft, Apple, Google and Amazon. What counts is the next 60 days, when the biggest names in technology do battle at a near-unprecedented scale and pace.

Just on Thursday, Amazon compared its Kindle Fire with Apple's new iPad mini, point by point, in its earnings release, an unusual forum to name rivals. Apple CEO Tim Cook compared Microsoft's Surface tablet to an over-engineered car that can fly and float. And Microsoft went for the iPad, saying its Surface boasted twice its storage.

All three tablets will vie for the shrinking consumer dollar these holidays. By tech standards, it's getting ugly.

"The tablet space is where the growth is. That's why they are all fighting over it. PC shipments are down and some tablet buyers may never buy another PC," said Michael Allenson, strategic consulting director in the Technology and Telecom Research Group at Maritz Research.

"Last holiday season, we saw a lot of buying of tablets in the $200 to $300 price range. This year, the iPad mini and Amazon's Kindle Fires are targeted as large gifts. They are trying to ride that wave and win as much as they can."

The impending clash is far from decided.

Odds-on favorite Apple has lost some of its aura of invincibility, with Google's Android and Samsung making inroads into its reign in smartphones, Microsoft's quickening marketing blitz, and Amazon's Kindle nipping at its heels as the No. 2 tablet in the United States market.

That competition has weighed on Apple's share price, which is at three-month lows after it reported a second straight quarter of disappointing results, sullying its reputation for blowing away Wall Street estimates.

Google is struggling to figure out the dollars and cents of the mobile market and Microsoft is facing witheringly unimpressed reviews for its new Windows 8 platform and Surface tablet.

Meanwhile, Amazon's outlook for the holiday season is being taken as a disappointment, and Best Buy warned late Wednesday that sales and margins are falling.

CLAWS COME OUT

Tech companies hope lackluster calendar third-quarter results mean consumers have held off from buying gadgets so they can save up for something new and shiny this Christmas -- from the lowest-end Fire at $159 to a Surface around $499 or the biggest, fastest, newest iPad at $829.

The technology industry is grappling with a fundamental shift from deskbound computers or heavy laptops to sleek mobile devices like tablets, which are upending the traditional PC model and prompting companies like Google and Microsoft to invest deeply in hardware manufacturing.

Their entry however is raising the competitive stakes. Companies like Apple usually spend most of their time talking about how great their own products are, but with the competition more intense than ever, Apple CEO Cook spared a not-so-kind thought for Microsoft on Thursday.

"I haven't personally played with the Surface yet, but what we're reading about it, is that it's a fairly compromised, confusing product," he said, later adding "I suppose you could design a car that flies and floats, but I don't think it would do all of those things very well."

Cook may have been going for levity, but the Twitterati booed his joke, since after all most gadget-heads would be very content with a flying, floating car.

Microsoft CEO Steve Ballmer, for his part, was pretty impressed with the company's handiwork, notwithstanding reviews that used words like "disappointing" and "undercooked."

"We have a device that's uniquely good at being a tablet and a PC (with) no compromise on either one," Ballmer told Reuters Television ahead of the Windows 8 launch event in New York on Thursday. "Work. Play. Tablet. PC. Boom! One product."

Google Executive Chairman Eric Schmidt, in a talk this month, took a shot at Apple, which has faced a barrage of complaints about glitches in its mapping software since dumping Google's service from its iPhone.

"What Apple has learned is that maps are really hard. They really are hard," he said. "Apple should have kept with our maps."

Not to be outdone in the sniping, Amazon Chief Executive Jeff Bezos took a subtle swipe at Apple's high prices in the Internet retailer's quarterly results statement Thursday, saying "our approach is to work hard to charge less."

Right below those comments, Amazon listed head-to-head comparisons between its $299 8.9-inch Kindle Fire HD tablet, its $199 7-inch Kindle Fire HD device and Apple's iPad mini, which was unveiled on Tuesday.

Analysts were taken aback by how brazen Amazon was being in taking shots at peers.

"I have never seen them directly compare products in a results release like this, and in so much detail clearly calling out their competitors," said RJ Hottovy, an equity analyst at Morningstar. "This shows they are taking the tablet wars very seriously."

(Additional reporting by Bill Rigby in Seattle; Writing by Ben Berkowitz; editing by Edwin Chan and Raju Gopalakrishnan)

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Before You Go

The 7 Surface Reviews You Should Read
'It Is Undercooked'(01 of07)
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Gizmodo's Sam Biddle had plenty to praise for the Surface RT -- for its design, its version of Internet Explorer -- before listing a litany of flaws and recommending not buying it. Wrote Biddle:
We're not there yet. Surface is a fantastic promise, and holds fantastic potential. But while potential is worth your attention, it's not worth your paycheck. Surface RT gets so many things right, and pulls so many good things together into one package. But it is undercooked.
 (credit:AP)
'Yes, You Can Use It As Your Only Computer'(02 of07)
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Like Biddle, Wired's Mat Honan complained about typing difficulties and lack of apps, but overall was pleased.
Yes, you can use it as your only computer. I would never have made that claim about an iPad or Android tablet. But if you only need to live in Microsoft Office and the web and e-mail, and use your computer for media consumption, you’ll do great with this. I used it as my primary computer for several days. There were applications I missed, and I would never want it to be my only computer (the keyboard and screen are just too small) but it worked. I was fine.
 (credit:AP)
'A Brilliantly Conceived Machine Whose Hardware Will Take Your Breath away — But Whose Software Will Take Away Your Patience'(03 of07)
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The New York Times' David Pogue laments the "split personality" of the tablet: It's hardware is beautiful, it's software is heartbreaking."In time, maybe the Windows RT apps will come. Maybe the snags will get fixed. Maybe people will solve the superimposed puzzle of Windows RT and Windows 8," Pogue writes hopefully. "Until then, the Surface is a brilliantly conceived machine whose hardware will take your breath away — but whose software will take away your patience." (credit:AP)
'A Slate Upon Which You Can Get Some Serious Work Done'(04 of07)
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Engadget's Tim Stevens makes another distinction: Between those who want a tablet to create or to consumer. The former, he says, will want to look closely at the Surface RT.From Stevens' review:
The Microsoft Surface with Windows RT's $499 starting MSRP means those thinking about making the investment here will be carefully cross-shopping against same-priced offerings from Apple, ASUS and others. Where does this one rate? Very well -- but very differently. While those devices are primarily targeted at content-hungry consumers, the Surface is a slate upon which you can get some serious work done, and do so comfortably. You can't always say that of the competition.
 (credit:AP)
'Surface RT Isn’t A Tablet'(05 of07)
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Ultimately concluding that consumers should wait out this generation of Surfaces until Microsoft does some improvements, TechCrunch's Matt Burns argues that this really isn't a tablet:"It’s not a legitimate alternative to the iPad or Galaxy Note 10.1. That’s not a bad thing," he says. "With the Touch Covers, the Surface RT is a fine alternative to a laptop, offering a slightly limited Windows experience in a small, versatile form. Just don’t call it an iPad killer." (credit:AP)
'Surface Is The Most Flexible Tablet I've Ever Used'(06 of07)
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Tech blogger Anand Shimpi called the tablet "recommendable" in a generally positive review. He writes thus:
Surface is the most flexible tablet I've ever used. Through two seemingly simple additions to the design (but incredibly complex to actually develop and implement), Microsoft took a tablet and turned it into something much more. If you're frustrated by productivity limits of currently available tablets, Surface really seems to be the right formula for a solution.
(credit:AP)
'It May Give You The Productivity Some Miss In Other Tablets'(07 of07)
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The Wall Street Journal's Walter S. Mossberg argues that if you can look past the flaws (mediocre battery life, poor app selection) buyers who want productivity out of their tablets should consider the Surface RT."Microsoft's Surface is a tablet with some pluses: the major Office apps and nice, optional keyboards," he writes. "If you can live with its tiny number of third-party apps, and somewhat disappointing battery life, it may give you the productivity some miss in other tablets." (credit:AP)
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