Beyond the Surface: Microsoft Goes Apple

Microsoft, which has long made its money off of licensing software, is edging more and more into the hardware business. The trend was confirmed in an annual shareholder letter from CEO Steve Ballmer.

“There will be times when we build specific devices for specific purposes, as we have chosen to do with Xbox and the recently announced Microsoft Surface,” wrote Ballmer in the letter.

I’ve gone on the record saying that I think Microsoft making more hardware is a grand idea (See “Microsoft: Keep Making Hardware”). My Xbox 360 has been the gift to myself that keeps on giving; I bought it as a simple gaming device back in 2008, and it has since transformed itself into the brains of my living room, and probably the principle reason I was able to cut the cord (See “Five Reasons Cutting the Cord May Not Be for You”).

The urtext on Microsoft and its frustrations with its hardware partners is this excellent report from the Times back in June, which details why Microsoft decided to go it alone on the Surface tablet.

Ballmer stressed in his letter that partnerships with hardware manufacturers would remain central to the company’s vision. “We will continue to work with a vast ecosystem of partners to deliver a broad spectrum of Windows PCs, tablets and phones,” he wrote. “We do this because our customers want great choices and we believe there is no way one size suits over 1.3 billion Windows users around the world.”

One wonders, though, how hardware partners feel about the increasing trend of the tech giants to want to design devices in-house. Apple prized hardware from the start; Google bought Motorola to increase its own device-y bona fides; and now Microsoft is doubling down on making not just the brains to its devices, but the bodies as well. How are you feeling right now if you’re Lenovo, ASUS, or Dell. Especially if on top of making better devices with a stronger brand, your “partner” is all but pricing you out of the market, too?

Even Microsoft’s kissing cousin Nokia has been blindsided by some of Redmond’s forays into hardware. “We were no different than anybody else,” Nokia CEO Stephen Elop told GigaOm.

On top of the Surface tablet and continual innovations in its Xbox, Microsoft is rumored to be contemplating a Surface phone. What other hardware would you like to see from Microsoft? Do you think it should double down in its investment in hardware?