Microsoft Surface tablet sales off to an encouraging start

U.S. shoppers woke up with mild Surface fever on Friday, lining up in moderate numbers to buy Microsoft's groundbreaking tablet computer designed to challenge Apple's iPad.

The global debut of the Windows 8 operating system was greeted with pockets of enthusiasm, but not the mania reserved for some previous Apple Inc launches.

Microsoft is positioning the slick new computing device, which runs a limited version of Windows and Office with a thin, click-on keyboard cover, as a perfect combination of PC and tablet that is good for work as well as entertainment.

"I like the flexibility of having the keyboard and the touch capability," said Mike Gipe, 50, who works in sales for bank Barclays, and was planning to buy a Surface tablet at Microsoft's pop-up store in Times Square in New York.

"It's the combination of having the consumer stuff and the work stuff," he said, looking forward to using Excel spreadsheets and PowerPoint presentations on the new device.

The Times Square store was the first to sell the Surface Microsoft's first ever own-brand computer and other Windows 8 devices late on Thursday and will be open through the holiday shopping season. On Friday morning it was crowded with a mix of tourists and local office workers, but the cash tills were not jammed.

"With the other tablets you're a consumer. With this you can have input," said Peter Townsend, on vacation in New York from Australia with his wife, who bought a Surface tablet because he liked the keyboard.

Mark Pauluch, 28, who works for a New York private equity firm, said he would like a Surface because he does not want to take a laptop on a plane, but was disappointed when the sales representative told him the wifi-only Surface would not work with Cisco VPN networking.

"I can't use this to replace my work laptop unless it supports VPN," he said.

Midwest, west coast
Elsewhere in the United States, there was solid but not overwhelming interest for the Surface.

"It's a good tablet. I am not a huge i-anything fan, I like Windows," said Matt Shanahan, a software developer who drove four hours to the tiny Michigan Avenue pop-up store in Chicago from Grand Rapids, Michigan to buy a Surface. "My friend and I are software developers and this gives us an opportunity to develop new apps," he said.

In a pop-up store at the San Francisco Centre mall about 50 people lined up to buy the new Surface.

"On an iPad you have to use half the screen for a keyboard, or buy an accessory. I love that the Surface is so integrated, that you can type and use Word and all my other programs," said Malte von Sehested, a textbook creator who bought a Surface.

"With the Surface you get a steeper learning curve I had to get someone to show me how to side-swipe, swipe out to get the menus for instance," he said. "It may take a week, before it all becomes natural. That could be a problem for Microsoft. My old dad, he would get hit by that steeper learning curve."

Analysts patient
Wall Street and tech industry experts failed to show great enthusiasm for Windows 8, but were prepared to give Microsoft time to succeed.

"Microsoft did not come out with Windows 8 thinking it will be an overnight success," said Daniel Ives, an analyst at FBR Capital Markets. "But there's hope that this could be the silver bullet of growth (for Microsoft) as well as giving the PC industry some optimism that there's better days ahead."

The next six to 12 months is a "crucial period" for Microsoft to get traction with consumers, added Ives.

Sarah Rotman Epps, an analyst at tech research firm Forrester, said consumers may be best served waiting for tablets running the full Windows 8 Pro and Intel Corp chips, which are due out early next year.

"Windows 8 has a lot of great features, but RT has a long way to go," she said, citing a lack of apps and poor video performance on the Surface.

"It's not really a PC. RT is too restricted. Some people will be happier with the full Windows 8," she said.

Microsoft shares were up 33 cents at $28.21 on Nasdaq on Friday. Apple shares were down slightly after disappointing earnings on Thursday.

Windows 8 launches in India for Rs. 1,999

Global software major Microsoft late Thursday unveiled its Windows 8 version of the operation system in India as part of its worldwide launch.

"Retail and enterprise users worldwide will be able to experience from Friday all that Windows has to offer with a new user interface, a host of applications from its store," Microsoft India chairman Bhaskar Pramanik said in a statement late Thursday.

The bundled version will be available on form factors ranging from tablets to laptops and ultra notebooks from 14 OEM (original equipment manufacturer) partners, including Acer, Dell, Fujitsu, HCL, Hewlett Packard, Lenovo, Samsung, Sony, Toshiba, Wipro and Zenith Computers.

Over 250 Windows 8 enabled devices, including 23 new SKUs (stock keeping unit) of Windows 8 PCs are available across 100 cities and over 2,500 retail stores.

Unlike its earlier versions, including Windows 7, Windows 8 boasts of an intuitive start screen and tiles with rich content and update in real time.

"As Windows anytime upgrade (WAU), the latest version is cloud connected. Users will have to sign once with their MS (Microsoft) account to ensure they will be able to access mails, calendars, contact, pictures among other apps (applications," Pramanik said.

The new OS (operating system) will have two versions at retail - Windows 8 & Windows Pro, while Windows 8 enterprise offers mobile productivity with features like To Go, Direct Access.

"Users can upgrade their personal computers (desktops) that have Windows XP, Vista or Window 7 at an affordable price of Rs.1,999 till Jan 2013," Pramanik added.

Microsoft tablet "compromised": Tim Cook

Apple chief Tim Cook on Thursday branded the new Microsoft tablet "compromised" as his company's coffers swelled due to soaring sales of iPads and iPhones.

Cook gave his early impression of Microsoft's Surface during a conference call to discuss Apple's earnings report profit of $8.2 billion last quarter on revenue of $36 billion.

"I haven't personally played with the Surface yet but what we are reading about it is that it is a fairly compromised, confusing product," Cook said.

"I suppose you could design a car that flies and floats but I don't think it would do all of those things very well."

He expressed confidence that buyers will prefer iPads.

The California-based company said that it sold 26.9 million iPhones and 14 million iPads in the recently ended quarter, topping sales in the same period last year by 58 percent and 26 percent, respectively.

The earnings however fell short of Wall Street expectations, and Apple shares were down slightly to $609.25 in after-market trades.

China remained a hot spot for Apple, with revenue there up 26 percent in the quarter and the iPhone 5 to be released there in December, according to Cook.

"We're very proud to end a fantastic fiscal year with record September quarter results," said Cook.

"We're entering this holiday season with the best iPhone, iPad, Mac and iPod products ever, and we remain very confident in our new product pipeline."

Apple on Friday will begin taking orders for its iPad mini models unveiled this week at a media event in Silicon Valley.

The same day, Microsoft will launch Surface tablets along with a new-generation Windows operating system crafted to bring together smartphones, desktop computers, laptops and tablets in multi-screen lifestyles.

The iPad mini's touchscreen measures 7.9 inches (20 centimeters) diagonally compared to 9.7 inches on the original iPad.

A 16-gigabyte version of the iPad mini with Wi-Fi connectivity costs $329, while a 16GB model with both Wi-Fi and cellular capability costs $459.

The top-of-the-line 64GB iPad mini with Wi-Fi and cellular connectivity will sell for $659. Like later versions of the original iPad, the new Apple tablet also features rear- and front-facing cameras.

The iPad mini weighs 0.68 pounds, less than half the original, and is 7.2mm thick thinner than a pencil.

Apple also unveiled a fourth generation of the original iPad for the same starting price of $499 for a 16GB model with Wi-Fi connectivity.

While the cheapest iPad mini costs $329, the device is still considerably more expensive than the seven-inch tablets from Amazon, Google and Samsung which start at $199.

Cook on Tuesday coolly introduced the iPad mini, considered his first Apple product not bearing the thumbprint of late co-founder Steve Jobs, who derided small tablets as "DOA."

Cook stood by the quote, contending that the iPad mini screen size of nearly eight inches diagonally put it in "a whole different league."

"We would not make one of the seven-inch tablets," Cook said. "We would never make one."

Apple chief financial officer Peter Oppenheimer maintained that Apple priced the iPad mini "aggressively," accepting smaller than typical margins on tablet sales for now while working to bring down production costs.

"We've seen low-cost challengers before and iPad continues to beat any competitors," Cook said. "Making the best product will win at the end of the day, so we will stay true to that."

Apple this week also introduced slick upgrades to its line of Macintosh computers, sales of which have outpaced the overall personal computer market for six years running.

Apple slimmed down its top-selling model, the 13-inch MacBook Pro, and gave it a "retina display" that boasts richer images than those on high-definition television sets. Starting price for the new MacBook Pro model was $1,699.

A new model iMac with the computing hardware built into its slim monitor started at $1,299 with the first models available in November.

Apple said that it sold 4.9 million Macintosh computers in the recent quarter in a one percent rise from the same three-month period last year. However, sales of iPods dropped 19 percent to 5.3 million, according to the earnings report.

Apple announced it would pay a cash dividend of $2.65 per share of common stock.

"We're pleased to have generated over $41 billion in net income and over $50 billion in operating cash flow in fiscal 2012," Oppenheimer said.

Apple did not comment on rumors that it is planning to launch an Internet radio service, but the unconfirmed reports caused Pandora stock to dive.

Analysts see recovery sprouting at FarmVille creator Zynga

Zynga Inc's quarterly revenue beat and its higher full-year earnings forecast show the embattled "FarmVille" creator may be on the path to recovery, analysts said, with at least one brokerage upgrading the company's stock.

Shares of the company were set to open 17 percent above Wednesday's closing price of $2.12 on Thursday.

Zynga raised the lower end of its 2012 earnings forecast on Wednesday and also announced a new deal with British company bwin.party to offer online real-money gambling and a $200 million share buyback plan.

"The announcement of a buyback, while rare for a company that less than a year ago was considered a 'high-flying', fast-growing 'hot' IPO, nonetheless signals that the board is confident in the company's future," Needham & Co analyst Sean McGowan wrote in a note.

He raised his rating on the stock to "buy" from "hold".

"While not bullish on the likely success of Zynga's new titles, since management recognizes that its older social games on Facebook are falling, it will spend accordingly and pivot more quickly to mobile," McGowan said.

Zynga laid off 5 percent of its full-time workforce and shut its Boston office on Tuesday as part of a sweeping cost-cutting campaign that may eventually see the company close its Japanese and British studios as well.

While it is healthy to evaluate cost-cutting initiatives, any material reduction in Zynga's creative talent could also lead to an erosion in innovative new game development, Piper Jaffray said in a note.

A new share buyback and real-money gaming partnership with Bwin.party will help, but ultimately Zynga needs to demonstrate it can produce hit titles on multiple platforms - mobile, social and browser, Robert W. Baird & Co said in a note.

As sales from one-time cash cows, "FarmVille" and "CityVille," are fading fast, Zynga is now investing more heavily in "mid-core" games, which require more development resources but are more immersive.

"We expect the strength of its development capabilities as well as its distribution to eventually drive better performance; we believe caution is warranted until we see signs of improved execution," BMO Capital Markets analyst Edward Williams said.

Since going public at $10 per share, Zynga has lost over three-quarters of its market value. It has been hit by delays in its game pipeline as older titles fade, while it has struggled to come up with new hits for mobile devices.

Apple now lets you pay in rupees for apps bought via Indian App Store

As an App Store user in India, if you suddenly see apps like WhatsApp Messenger, Angry Birds Space or Keynote listed with an INR pricing, rest assured that it's not a bug. Apple has begun rolling out INR pricing for apps in the Indian App Store prefixed with "Rs." thereby replacing the earlier $ sign.

If you now browse throughout the Indian App Store, you'll find most of the apps with the INR pricing. Though initially some apps were being displayed incorrectly without the actual conversion ($0.99 displayed as Rs. 0.99), the issue seems to be addressed with seemingly all apps now listed at the current price. The company is using the current exchange rate for conversion.

It's interesting to also note that Apple is using "Rs." instead of the official Rupee symbol. But we're not complaining. It's a much awaited feature that many were hoping to see. Now when you send an Indian App Store link to anyone, the browser also displays the price in "Rs.".

Apart from INR, Apple has included support for 7 other currencies, which it circulated in an email sent to developers;

The App Store now supports new currencies in the following eight territories, so your customers can easily purchase your apps in their local currency:

Russia: Ruble (RUB)
Turkey: Lira (TRY)
India: Rupee (INR)
Indonesian: Rupiah (IDR)
Israel: New Shekel (ILS)
Saudi Arabia: Riyal (SAR)
South Africa: Rand (ZAR)
United Arab Emirates: Dirham (AED)

Just a week ago, Google adopted a similar policy and broke the news via blogpost to confirm thatIndian users can soon start paying for apps and in-app purchases in rupees on the Google Play Store. Russia was also added to the list. 

The company asked developers to set INR and RUB prices of their apps by October 25th, which indicates that Google might introduce INR pricing in Play Store from Friday. Google also said that in case the developers could not set the price before the deadline, Google will automatically assign the INR and RUB prices based on the exchange rates.