Is Microsoft Downplaying Its Surface Tablet?

Microsoft’s branded Windows 8 tablet, Surface, got some lip time from Microsoft CEO Steve Ballmer during the keynote yesterday at the company’s Worldwide Partner Conference in Toronto. But it wasn’t the usual Ballmer bombast. It was actually kind of tame.

It’s true that Microsoft has to walk a tricky line between Surface and Windows 8 partner devices. What if Surface sputters? Microsoft will look like an Apple wannabe (again), and will shuffle back to its partners, tail between legs.

But with comments like this below, Big Steve seems to be hedging his bets on Surface.

He said that while a leading device, “Surface is just a design point; it will have a distinct place in what’s a broad ecosystem. And the importance of the thousands of partners that we have that design and produce Windows computers will not diminish.”

To that Ballmer added: “We may sell a few millions [Surface tablets], but we need partners to have that diversity of devices. We’re excited about the work our OEM partners are doing with Windows 8 devices.”

Uh huh, so excited that the company went out a made a tablet of its own to compete with those OEMs.

Obviously, this is a partner conference, and Ballmer is catering to his audience. But the “we may sell a few millions” line is tepid, especially for a guy like Ballmer who regularly predicts bonanza sales for everything.

A few million Surface tablets compared to 375 million Windows devices overall is like a drop in the ocean. From the tone of this keynote, Microsoft is framing Surface as another tablet in the Windows 8 army. But Surface is supposed to be special, the key weapon that can take down the iPad. Right? Isn’t it?

With Microsoft only selling Surface at its own online and brick-and-mortar retail stores (of which there are only 21) and Ballmer careful not to disturb the partner universe, you have to wonder if Acer founder Stan Shih wasn’t telling the hard truth recently when he said that Surface is a temporary ploy to generate buzz for Windows 8 tablets and encourage OEMs to raise the bar on hardware design.

I don’t think it’s ever been Microsoft’s intention to use Surface tablets to compete directly with Dell, HP or Lenovo, and it’s no secret that Microsoft makes a heck of a lot more money licensing its software that it could ever make from hawking and supporting hardware.

So maybe Surface is being used as a wake-up call for OEMs to step up their game and show them what’s possible with hardware design. That strategy worked for Google’s Nexus phone, which lit a fire under Android hardware makers and then faded into the background. Maybe, in the end, Surface is decoy of sorts and we all got a little too excited about Surface changing the world (I’m guilty of it).

But this still leaves Microsoft in a sticky situation. The tablet market is vitally important and Microsoft can’t afford to look unsure of itself. If Microsoft makes Surface difficult to purchase or throws it in a melting pot with other OEM Windows 8 devices, people will get confused and forget about Surface. Instead of creating clarity, Surface could just add more confusion to Windows 8.

And you know what confused consumers do? They look for a simple deal, like the new small and cheap Google Nexus 7 tablet.

Or they get swept off their feet into an Apple Store, where everything is magical and no hardware partners are mucking about.