Microsoft Admits Its Risks with Surface

Microsoft last week confirmed what most analysts and company watchers had concluded last month when the firm unveiled its own tablet, that it risks alienating the computer makers which account for the bulk of Windows sales.

In a document submitted Thursday to the U.S. Securities and Exchange Commission, Microsoft acknowledged the potential problem.
 
"Our Surface devices will compete with products made by our OEM partners, which may affect their commitment to our platform," Microsoft said in the 10-K filed for the second calendar quarter of 2012.

The New York Times' Bits blog first reported on Microsoft's SEC filing.

The statement appeared in the section dedicated to risk factors, where Microsoft also noted that smartphones and tablets -- device categories dominated by rivals Google and Apple -- threatened its business.

"Users may increasingly turn to these devices to perform functions that would have been performed by personal computers in the past," the filing stated. "Even if many users view these devices as complementary to a personal computer, the prevalence of these devices may make it more difficult to attract applications developers to our platforms."

It was the first time Microsoft described the competitive hazards of mobile devices in such blunt language.