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>The only "huge negative impact" that I can see from this is pushing the hardware manufacturers to innovate harder and do better with the use and distribution of the software.

MS can't have it both ways unless they want to become Apple. You can't ask an OEM to innovate and take most of their profits away in a race to the bottom market. It's simply not fair.

MS is going to have to make a choice in the future of who they want to become. They can't slam Google a year ago for what they are doing now.

I'm not sure how MS can find a way out but they had better do so soon because the future is being decided during MS's conflicted beliefs and the risk is greater than just losing Windows dominance.

MS is doing the opposite of a race to the bottom. They are raising the bar. Your product must this good to enter the market. Make something better than the Surface and sell it for a 20% margin, instead of the 0.2% margin the current crap makes.

MS can't have it both ways unless they want to become Apple. You can't ask an OEM to innovate and take most of their profits away in a race to the bottom market. It's simply not fair.

Why not, exactly? As long as it increases Microsoft's profits, what prevents them from doing this?

It's not like this is the first time MS have done the hardware/software combo (which has been pretty successful for them)... xbox anyone?

That's an entirely different level though. A game console is a far different beast (with arguably a different customer base with wildly different expectations) than a general purpose computer.

As it stands, the only company to have been successful in the consumer sector with that formula has been Apple. It'll be interesting to see if Microsoft can pull it off.

If the Surface is like the Xbox, Microsoft has a problem. The Xbox did cost billions and took years until it made a profit. When the Surface costs billions for years and at the same time Microsoft pisses off the hardware producers they will focus on Ubuntu/Android/ChromeOS devices. This would hurt the big cash cow Windows licenses and make Microsoft weaker than ever.

Linux/Android/Chromium are not economically viable alternatives to Windows for hardware manufacturers on a large enough scale.

On the consumer side it's "Not only is it not a Mac, it doesn't even come with Windows."

On the commercial side it's, "Can it run Excel" - some things never change and Visicalc is still the killer application, so to speak.

It is, in my opinion, a mistake to expect corporations to operate on the principles which drive persons. So long as Windows remains a profitable operating system for Acer, Acer will continue to install it. And that will continue to be the case unless Best Buy starts hiring Linux gurus for its sales floor.

For the XBox model to work, apps will have to cost $40.

Xbox did lose Microsoft billion(s) and take years to become profitable. But now it is profitable and one of their key products. They could lose billions on the Surface but they can also afford to lose billions. They have lost billions on terrible acquisitions in the last decade. I think it is better to spend the money on products that could help them be competitive.

The Xbox 360 also had significant hardware problems that weren't alleviated until price did not become an issue for MS which is how it's always been on consoles.

Or the Zune.

>I have been wondering for years if Microsoft is ever going to drop the hammer and get some control on their software distribution by designing hardware with the intention of allowing the software to run as intended.

But they did not have to decide to make their own hardware: they could have imposed controls on bloatware as a condition of OEM's licensing Windows.