 Welcome to News Desk on SiliconANGLE TV for Friday, October 26, 2012. I'm Kristen Folletti. Yesterday, Microsoft put its surfless tablet center stage at its Windows 8 launch event, hoping the new device will compete with the likes of Apple and Google in the mobile computing market. But is the allure of this new tablet only surface-deep? Here to tell us more is SiliconANGLE contributing editor, John Casaretto. Welcome, John. Good morning. With interest in traditional computers waning, the world's largest software company is attempting to reinvent the Windows PC in a new format and directly challenge Apple's all-conquering iPad. How does Surface stand up to the iPad, in your opinion? Well, it is a complete reinvention, particularly when you're talking about the tradition of Microsoft. A lot of research and a lot of investment has gone into developing this product. To be clear, this is the Surface RT that's released today. So there's a lot of pent-up anticipation to see what Microsoft has put out and it's going to actually land in people's hands. It's very similar to the iPad. It's been engineered gear to have. It'll seem familiar to a lot of people, especially with the new interface. It comes with the Windows 8 RT interface, which is a stripped-down version of the full Windows 8 OS. But there are a number of differences that I think make it a very good challenger to the iPad. At that same price point of $499, it first of all has 32 gigs of RAM compared to the iPad's 16 gigs of RAM. But there are a number of add-ins, things like that that Microsoft has put in. One thing of note that is expected to be popular is that the touch cover, which has a number of fans out there, it's extremely thin. It's got the keyboard functionality built into it. That's not included in that price. But it's going to be interesting to see how the public reacts to this product right out of the gates this first day and in the coming weeks. Panos Panay, head of the Surface Project, demonstrated the tablet's features, beaming video and music to other screens, showing off the ultra-thin cover that doubles as a keyboard, and hooking up a camera to the device's USB port. He even dropped the device on the floor to demonstrate its durability. Microsoft has deployed a new commercial to accompany the launch of the Surface tablet called Surface Movement. Have you seen it? I've seen the commercial, yes. So taking a look at the commercial, do you think they're trying to use a similar marketing strategy to Apple's? Absolutely. I think that the target market, the demographics for this is going to be that hip crowd. So there'll be a lot of integration of music, slick colors. There'll be a lot of those points, and you'll probably see a lot of things similar to that coming out soon and over the weeks as we head into the holiday season. Analysts say that Microsoft's challenge now will be to educate the market as to why different is also better. What approach do you think they'll take for that challenge? Well, I think that they're counting on word getting out. They're definitely putting their efforts into marketing, but I think that you're going to see more of these sleek commercials and things like that, but I think word of mouth is going to be the big thing. I mean, that's the way a lot of products have gotten out there. There really wasn't a huge campaign for Kinect per se, and it's a popular product. I think that's what they're shooting for. They do have successes. Again, I mentioned the Kinect, but the Xbox, of course, is a dominant machine in the consumer market. They've also got a number of tie-ins, that opportunities to tie this into other products and things like that that they'll be looking to explore for sure. Apple CEO Tim Cook wasted no time shooting back at Microsoft's challenge. He said he hasn't personally played with the surface yet, but that it looks like a fairly compromised, confusing product. He also made the analogy that you could design a car that flies and floats, but I don't think it would do all of those things very well. What are your thoughts on his comments? Well, this is their turf. They're going to be shot, and I think it's going to be interesting, particularly if and when, as expected, Microsoft really starts to gain some market share. I think that we'll hear more of this, that this is better, this keyboard is not as responsive, and just little nitpicky little things like that. But I think overall, Microsoft has put so much into development of this product and clearly here to stay. At least that's their intent. So we'll see. We'll see more shots and these kind of things will continue. So the comments are not surprising. Windows 7 was introduced three years ago, but Windows 8 represents the biggest change in Microsoft's user interface since Windows 95 came out 17 years ago. The radical redesign, which dispenses the start button and features square tiles for apps, may surprise some users. What do you speculate consumers' reactions to Windows 8 will be like? Well, the early indications are that it's going to be a success. There's been indications that the demand has been great, the pre-sales sold out last week. They're going to be aligning that brand, the surface brand, across a number of products. They've got a number of ways to do that. Of course, they got the Xbox. They'll tie into that somehow. There's a bunch of 360 million hotmail users. That's a huge base they can get that message across to. Of course, that's worldwide. So we'll see. If purchase decisions, they're going to be coming. And I think that what we're going to see is that based on a product that's competitive, but still remains elite, that's going to be a distinguishing factor. What about apps on the Windows 8? How will they look? Will users have a good selection? I think that that market will come. It'll continue to grow. Right now, I think the last count that I saw out there was about 1,000 apps. That killer app is not out there. So if they're banking on the killer app to really make the surface a success, at this point, I don't really see it, but it could be around the corner. It might be Xbox related. It could be Skype. There's a number of features that come with the surface in terms of cloud integration. It could be the office that's included on it. The Windows 8 RT comes with a built-in version of Office. So we'll see what apps come around the corner and how that distinguishes itself from the other marketplaces that are out there. Windows 8 devices went on sale early this morning. How easy is it going to be to upgrade to Windows 8? Well, for users that are still running XP, Windows 7, Windows Vista, there's a download upgrade. It's available for $40. It's a pretty quick install. And that's running through the end of January. So apparently they're making it pretty easy to go ahead and upgrade right away. How do you think the business world is going to respond to Windows 8? There's always a curve when it comes to the business world. A lot of companies choose to sit early adoption out. And a lot of testing will take place, but they'll come around. I think that an interesting value add, a compelling value add, is going to be integrating Office into the device. The enterprise has long been looking for a business device and the ability to stay native with great features and all that. I mean, it's a winning formula and I think that's a big thing that I think Microsoft is banking on. In conjunction with its big surface event yesterday, Microsoft celebrated the opening of a new store in Times Square. Do you think they'll be able to get dedicated consumers standing in line, stretching around the block like Apple has with their flagship stores? You know, that's a good question. I think there'll be a lot of curiosity for sure. I think doing it there in Times Square will be pretty interesting. It is a fantastic store and I think that they are expecting anticipating strong holiday sales. So we'll see. Will it make the news? I'm not sure. But again, they've got a number of products that they're banking on this season. Windows Phone 8, Windows 8 itself and the surface. I think that they'll continue to leverage, of course, their products that they know, including the Xbox and so on. So strong holiday sales. It's what they're shooting for and I think that the location is interesting. The surface tablet will begin shipping today. But while the surface has generated a lot of curiosity, so far it has not received rave reviews and users seem unconvinced. Sam Biddle at Gizmodo sums it up by saying, surface is a fantastic promise and holds fantastic potential. But while potential is worth your attention, it's not worth your paycheck. It is undercooked. John, what are your initial impressions of the surface? Undercooked. That's a good, that's an interesting quote. You know, I haven't held one thus far. But it could be this weekend. We'll see what happens. But it's a very sleek product. There's a lot of opinions out there and you know what they say about that. But again, this is Apple's territory and a lot of people are baked in with their experiences and their love for their devices that they have. There's been a number of other competitive products that for one reason or another have paled in comparison to the iPad. But a lot of times it there's been a lot of just a lot of resistance to really looking at any alternative that doesn't really capture their imagination. So, you know, I think we're going to see, you know, more and we're going to see more opinions like that out there. But I think that, you know, in general, over time, we'll see we'll see a lot of people, you know, coming around to the Microsoft surface and its ecosystem. And we'll see how that adoption plays out. Some of the feedback includes comments like it's not very useful unless you like to struggle and calling its portrait landscape laughably tall. Why do you think Microsoft chose to go with those dimensions? You know, that's interesting. And I have yet to actually see that aspect. Again, it's, you know, the MS design, I have no doubt that Microsoft's design is rigorous. The process for, you know, development has whatever has built in some type of strategy for that. My guess would be the fact that, you know, it wants to encompass the full desktop experience in terms of the future generation of the Microsoft surface, Microsoft surface, the pro that's coming out that's expected in the next 90 days. So I think that, you know, the fact that there'll be opportunities to put a full desktop on there, to potentially put a full, you know, game, you know, platform, at least suitable for that on there. I mean, those are the kind of things that really kind of, they have to encompass quite a bit, particularly with the goals that they're trying to do with Windows 8. So it's something that, you know, we'll see if that landscape or portrait landscape, you know, turns out to be a big issue for some people. Bouncing off of what you just said, another user has claimed the whole thing is honestly perplexing. If the device is not as good as or better than the best tablet and not a complete alternative to a laptop, who is this for? What is it supposed to be? What was Microsoft hoping to achieve with the surface? Well, again, this is a, that's another opinion that I'm not so sure it's non-subjective, but you know, I think it's incorrect. I think that maybe Microsoft isn't getting the message out there and that might be an issue, an ongoing issue. This is a very specialized product. I was going to use the word limited. It's a full feature product, but it's part of their strategy. This specialized product is for the consumer base. It's for touch interface. It's for, you know, very, you know, it's, there's a reason why there's a pro device coming out. The pro device will have the full, you know, desktop experience in the background, which you can, it'll basically be a, you know, a laptop or, you know, like a computer in your hands, you know, full computer, not just designed for tablet. So I think that, you know, if it's, you know, the part of the comment that says it's not as good, you know, again, it remains to be seen how the public at large takes that. So, but I think that Microsoft's goal is to create kind of a two-stage consumer adoption and then roll that into the enterprise adoption. And then that's what we'll see those two play off of each other in the long run. The launch of Windows 8 for the desktop saw quite a few negative reviews. If the surface is already seeing some backlash with, will the addition of Windows 8 Pro on the surface help or further damage the tablet's reputation? Yeah, I think it's actually, the Windows 8 Pro is an anticipated product. I think the enterprise has long been waiting for a product that, you know, has the full features of functionality that people expect, that's got, you know, apps and, you know, just the ecosystem is what the enterprise has been looking for, the ability to control those things through, you know, native architecture to stay native, the ability to run legacy applications for whatever reason, you know, your company may be baked in. I think that, you know, for the Windows 8 Pro, I think we're really looking at an enterprise space. And I think that, you know, I think that the reviews will be quite different. Again, there'll be a curve in that space. But that's really the, that's really the market for it. And the fact that, like you said in the demonstration and, you know, they dropped it. I mean, it's built to be industrial grade. It's not a consumer toy. So I think that, you know, that kind of leaks some of the, you know, some of the features that I think that will be great for the enterprise and they'll be looking at. And I think that when the Windows 8 Pro finally hits the market, you know, after a little bit, we'll start to see a lot of companies. You'll hear a lot of companies rolling out those things, holding back on deploying iPads in general, because, you know, they're going to favor a device that has the features that they're looking for. A surface user commented, this product is supposed to represent the future of Windows and Microsoft. So why do I feel so frustrated so often while using it? Microsoft has seen a lot of recent success with Xbox and getting users to engage at home. But they've really been struggling when it comes to on-the-go devices like the Windows Phone 8 and Surface and even the launch of Windows 8 for the desktop was met with some negative feedback. Why is Microsoft having such trouble getting back to their roots? Well, I think that, well, you know, as far as that user, I think there's a minor learning curve. And, you know, because it's new and people have been kind of used to Microsoft and how it's rolled out, it's Windows operating systems. You know, again, this is Apple territory. There's going to be a lot of convincing that needs to be done to win hearts and minds. You know, but again, I think they have the right strategy. They've been rebranding, you know, everything from HotMails, now Outlook.com, to their logo, to all these different things. They're really starting to become a consumer-focused company. So I think that, you know, they have that focus. They have that root in the consumers, but they've also got roots in the enterprise space. I think that to capture those hearts and minds, they're going to continue with the slick ads, with the slick branding, with the co-branding and things like that. So, you know, it's just going to take a little bit of time, you know, that Microsoft has had some disasters in the past. There's a number of phone devices and, you know, Windows Vista and a lot of things that Windows ME, a lot of things that people that haven't really cleared people's minds. So again, it's something that will play out over time, but I think that they'll get there. Absolutely. Not all of the reviews are wildly negative on the surface, but the primary takeaway is that it may not be better than the iPad. Is there anything you feel Microsoft can do to remedy the disappointment users are expressing? Well, I think that, you know, having the positive campaign, trying to again be, you know, roll those slick ads out, be hip, those kinds of things. They've got a number of things that they're throwing in there. You know, there's a Skype will come out, you know, next generations will see where they go with the devices as the device grows and adoption grows, and you know, this thing kind of goes on. But, you know, this is something that Microsoft needs to, you know, pay careful attention to because, you know, the users are everything. And it's something that will continue to evolve. And disappointment is something you definitely want to, you know, put it to debate early. Well, John, thanks so much for taking the time today, and we'll talk with you again next week. Okay, thank you very much. For all the latest in-depth coverage and breaking analysis on tech innovation, keep up to date with Newsdesk on SiliconANGLE.TV.