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Forget Apple: Microsoft's Surface Tablet Aimed at Dell, HP


During last night's unveiling of Surface, Microsoft (NASDAQ: MSFT) CEO Steve Ballmer indicated that if the company wanted to produce a great Windows 8 device to compete against Apple's (NASDAQ: AAPL) iPad, it had to build its own tablet. But in doing so, what does this mean for the leading manufacturers of Windows-based PCs?

"They have recourse," said Trip Chowdhry, the Managing Director of Equity Research at Global Equities Research. "Their recourse is to do better than Microsoft."

Despite the new competition, Dell (NASDAQ: DELL) maintained a positive outlook. "We remain a committed partner of Microsoft and are continuing to develop a full slate of Windows 8 products," a Dell spokeswoman told Benzinga.

Hewlett-Packard (NASDAQ: HPQ) declined to comment.

Meanwhile, shares of NVIDIA (NASDAQ: NVDA) are on the rise today as investors attempt to cash in on Microsoft's new tablet, which is being powered by a Tegra processor.

At press time, NVIDIA had not returned a request for comment. But AMD (NYSE: AMD) spokesman Travis Williams told Benzinga that while the company has not seen a Surface tablet, "we do look forward to the upcoming launch of Windows 8 and working closely with our customers like Acer, ASUS, Dell, HP, Lenovo, Samsung, Sony (NYSE: SNE) and Toshiba to ensure consumers have a myriad of platform designs to choose from once Windows 8 is in market."

"We continue moving forward with our plans to introduce the world's first workstation-class media tablet APU with complete x86 compatibility and unmatched graphics specifically designed for Windows 8," Williams added. "Our focus remains on providing consumers with the best visual experience, and the second-generation AMD A-Series APUs, E-Series APUs and 'Hondo' APUs are designed to do just that by accelerating the Metro user interface while maintaining our focus on performance-per-watt leadership."

"Microsoft has been, and continues to be, a strong partner of ours," Williams concluded.

Ultimately, Chowdhry thinks that a Microsoft-branded tablet is a "very good idea" but said that it should have happened 10 years ago. "Microsoft should have at least one branded desktop, one branded laptop, one branded tablet, one branded phone," Chowdhry told Benzinga. "Once you do that, you set benchmarks for your partner's behavior."

By not developing its own hardware, Chowdhry believes that the OEMs have been able to take advantage of Microsoft.

"I don't think the OEMs should have existed at all because they haven't helped Microsoft," said Chowdhry. "Today's Microsoft problems are not Microsoft-specific. It is the partners who are taking advantage of Microsoft."

Those "partners" should not even be in business, Chowdhry said. "Why? What is their business? Reselling somebody else's innovation and destroying it and putting junk on it? They don't deserve to be in the PC business if that's what they've been doing. And that's why they've been suffering. Customers expect more."

Follow me @LouisBedigianBZ

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