Microsoft-Branded Windows 8 Tablets Would Burn Bridges

It seems that lately when Microsoft is releasing a new version of Windows, the hardware scuttlebutt starts up again.

By “hardware scuttlebutt” I mean the notion that Microsoft will directly address the “Apple problem” and manufacture its own smartphone or tablet PC. It happened in the months preceding the launch for Windows Phone 7, and now as Microsoft ramps up for Windows 7’s successor — dubbed Windows 8 for now — it is happening again.

DigiTimes reported last week that Microsoft is planning on releasing its own tablet by the end of 2012.

“Microsoft is reportedly considering to launch an own-brand tablet PC that features Windows 8 by the end of 2012 with cooperation from Texas Instruments and Taiwan-based OEMs/ODMs, according to sources from the upstream supply chain. However, Microsoft did not confirm the rumor.”

History shows that Microsoft rarely follows through on hardware development, and when it does follow through, things don’t go so well.

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But if Microsoft does buck up and try to build a Windows 8 tablet on its own, it would be a grave mistake.

Why? There are a few reasons, but it starts with three words: Zune and Kin.

Microsoft’s poorly marketed and ultimately failed media player, Zune, ran out of steam against the mighty iPod. Kin, the poorly designed, priced and marketed social-media-centric phone for teens was dead on arrival.

Microsoft just doesn’t have a knack for branded hardware. Xbox 360 is the exception to the rule.

Another reason Microsoft won’t go down the branded hardware road is the Windows client OS for PCs is doing just fine running on partners’ hardware. Windows client has profit margins that most CEOs can only dream about. Why disturb the apple cart?

And speaking of hardware partners: Is Microsoft really in a position to alienate folks like Samsung, Toshiba and Dell, all of whom are getting nice and cozy with Google’s Android OS on tablets? In the smartphone space, hardware makers are all staring starry-eyed at Android, while Windows Phone 7 remains an afterthought. Why will tablets be any different?

In fact, tablets are much more important than smartphones. Windows is an enormous part of Microsoft’s overall business, and mobile is not. That’s why Microsoft needs to stay on good terms with the tablet hardware gang. One way NOT to do that is to compete against them.

Regarding the DigiTimes report, Business Insider editor and former Microsoft analyst Matt Rosoff surmises in a post that Microsoft is probably working with manufacturers in Taiwan to design tablets that can be labeled by phone carriers. Or maybe Microsoft is just creating reference designs to establish tablet standards and specs that hardware makers will be pressured to follow.

“But Microsoft building its own tablets?” writes Rosoff. “That’s crazy talk.”

Playing the Apple hardware/software game is a fool’s errand for Microsoft, and tablets are too important an area to fail again with Microsoft-branded hardware. The real money is in software, and Microsoft would be crazy to mess with that.

Shane O’Neill covers Microsoft, Windows, Operating Systems, Productivity Apps and Online Services for CIO.com. Follow Shane on Twitter @smoneill. Follow everything from CIO.com on Twitter @CIOonline and on Facebook. Email Shane at soneill@cio.com