Beautiful Microsoft tablet Surface let down by software gaps

Tech bloggers and other reviewers praised Microsoft Corp's new Surface RT tablet for beautiful design but said a shortage of applications and a slow operating system meant the result was heartbreak for users. Microsoft begins selling the Surface on Friday, joining the fight in a tablet market dominated by Apple Inc's (AAPL.O) iPads and devices using Google Inc's (GOOG.O) Android system. Reviewers given the product early to play with it said its first version paled in comparison with the iPad. Matt Burns of TechCrunch said the tablet was great and the Windows RT operating system showed promise, but he still was not keen. "There are simply more mature options available right now," he wrote. (r.reuters.com/tes53t) Similarly, Sam Biddle of Gizmodo, a technology website, said Surface had fantastic potential but he was sharply critical of the operating system, Windows RT, saying it was underpowered, lacked functionality. "While potential is worth your attention, it's not worth your paycheck. Surface RT gets so many things right, and pulls so many good things together into one package. But it is undercooked," he wrote. (r.reuters.com/xes53t) Microsoft's Windows 8 operating system, also available on tablets, had the full range of Windows apps but Windows RT does not, and lacks compatibility with older software, Vincent Nguyen at Slashgear said. (r.reuters.com/pus53t) "Microsoft hasn't done the best job explaining the differences, and many consumers are likely to buy RT only to find out they don't have the full functionality of Windows 8," added CNET's Shara Tibken. (r.reuters.com/nus53t) Microsoft has said it expects to have 100,000 apps in place for the tablet by January, whereas Apple has 275,000 iPad apps available now and its tablet also runs many more iPhone apps. "Microsoft says there will be thousands of apps at launch, with a constant stream of more coming, but its apps offerings pale next to the number Apple has made available for the iPad," Edward Baig at USA Today wrote. (r.reuters.com/kus53t) Wall Street Journal's Walt Mossberg praised the availability of Microsoft Office apps and optional keyboards. "If you can live with its tiny number of third-party apps, and somewhat disappointing battery life, it may give you the productivity some miss in other tablets," he said. (r.reuters.com/jus53t) But Wired reviewer Mathew Honan warned that the tablet would not turn heads. "Nobody asked me about my Surface. I tried flashing it all over the place. But despite my best efforts, no one seemed curious," Honan wrote. (r.reuters.com/ses53t) "The only person to comment on it was a TSA agent at the Seattle airport, who told me I didn't need to take my iPad out of my bag."

iPad mini won't upset low-end market - analysts

REUTERS - Apple Inc's "iPad mini" will attract new customers but the higher-than-expected price is unlikely to make it a threat to low-cost tablets such as Amazon.com Inc's(AMZN.O) Kindle, analysts said, in a muted reaction to the new tablet. Only a few analysts revise their price targets for Apple's shares ahead of the company's quarterly results announcement on Thursday. The shares were flat at $615 in morning trade on the Nasdaq. Canaccord Genuity raised its target on the stock to $800 from $797, while Barclays Capital cut its to $800 from $810. The 7.9-inch mini version of the iPad has most of the functions and features of the full-size $499 iPad but is cheaper by $170. However, the $329 price for the Wi-Fi only model was higher than many analysts had expected and some said the gadget might struggle to compete with the cheaper Amazon (AMZN.O) Kindle Fire and Google Inc's (GOOG.O) Nexus 7, which have prices starting in the $159-$199 range. The device may also lure buyers away from Apple's flagship 10-inch tablet, they said. "We were hoping the price would be at least a little lower given its competition is situated as low as $99, with many starting in the $199-$249 range," Barclays Capital analyst Ben Reitzes said. His new price target of $800 is more in line with those of other analysts, although most targets are still well above Apple's current share price. Demand for Google's Nexus 7 and Amazon's Kindle Fire is unlikely to be much affected by the launch of the mini given the significant price gap, Nomura Equity Research said. On a positive note, the high price made it less likely that the device would eat into Apple's margins, the brokerage said. Barclays estimated iPad mini sales at more than 5 million units in the December quarter, while Canaccord Genuity forecast sales of 9.25 million units during the three months. Apple sold about 17 million iPads in the quarter ended June. The iPad mini will help Apple reach a new customer base that may not have been able to afford the higher-end version, Canaccord Genuity analyst Michael Walkley said. "While we believe these strong sales will come largely at the expense of Apple's competition, we concede iPad Mini will likely cannibalize iPad and iPod Touch sales," Walkley wrote in a research note. Despite the cannibalization, the mini should greatly expand the market for iPads, whose sales have exceeded 100 million units in just two-and-a-half years after the tablet was introduced, Needham & Co analyst Charlie Wolf said. Apple will enjoy a very happy holiday season on its refreshed product line and because of the "hopelessly backlogged" iPhone 5 orderbook, he said. (Reporting by Sruthi Ramakrishnan and Supantha Mukherjee; Editing by Rodney Joyce and Sreejiraj Eluvangal)