Good points. I'd say your theory is my best guess, as well. However, MS needs to realize that the tablet has stopped some of us from going the OTHER way--to the Mac. I'm close to doing so, but will likely wait until next year in hopes of a Mac tablet. So, advertising their only CLEAR advantage over the Mac OS should be a priority. Oh, if only logic and common sense ruled the decisions of mighty MS.

Dude the clear grammar problems in your headline give me chills. please correct.... "doesn't" instead of "don't"

And "..would of.." to "would have", please. I can't believe the number of people who make this error.
In response to the article proper, though, tablets are also marketed in education, though their high price tag limits their adoption to private schools or pilot programs in large school districts.

Oops.... my entry was posted before I completed it. Anyway, to continue...

The reason OEMs don't enter the consumer space with the tablet is because the consumer space is a terribly low-margin business. Tablets, by virtue of the basic hardware required for their functionality, are still far too expensive to be profitable in a low-margin business, even in large volumes. The active digitizers, touchscreens and pens that both Wacom and N-trig produce are *not* cheap, by any stretch of the imagination. Nor are the protection plate on the display and the mechanical design of the tablet (hinge, chassis, etc.). I suspect that until someone introduces a touch/handwriting-recognition technology that is reliable and relatively low-cost, the dream of tablets becoming ubiquitous will remain merely a dream. And until there's a truly compelling reason for regular PC users to switch to a tablet, the rate of progress on this effort will be slow, making it even less likely that tablets will see large-scale adoption.

By not marketing the value, purpose and effectiveness of the tablet, Microsoft marginalizes a great tool and insures the hardware and software will be more expensive, further defeatng the who idea. While I hope I never have to go back to the standard computer. I do believe the new generation of tocuh screens and touch software might be revolutionary. Now all I need to do is market the touch-screen cleaning products to help remove all those greqasy smudges!!!

I don't have any inside info on Windows marketing, but here are some of my observations.

1) The SKU shift to Tablet would be net positive, because Tablet features are only available on the higher-priced SKUs, but the volumes of machines sold is small. So marketing here might not be a good return on investment. Classic chicken-or-egg.

2) Volume growth has been in consumer/entry level systems and that area is terribly price-sensitive. The extra $50-$100 bill of materials costs tends to remove opportunities here. Business and professional users love Tablet (insurance adjusters and healthcare for example) but it's hard to convince the ISVs to Tablet-enable their apps. Without custom app support, the $50-100 cost difference for Tablets is an unnecessary expense. So the most common usage in business is still notebook with pen as "super-mouse". Not terribly compelling.

3) Tablet is part of the larger Windows organization. As such, it's limited in what it can do for marketing, since every message must be vetted at (large number) different levels, and must add to the overall Windows strategy. For an innovation group like Tablet, this is the kiss of death.

4) Microsoft is not the leader in defining pen and touch input interface standards. Pen and touch digitizers have been around for a lot longer than Tablet, so the digitizer technology is relatively mature. A variety of niche solutions in this space has yet to be molded together into a larger standard. Standards again cost a little more in the beginning, as existing drivers and software are rewritten to the standard. Why isn't MS investing here?

As you know, I blogged about Tablet marketing in Dec07 http://blogs.msdn.com/hiltonl and took a lot of heat. It's also widely known thanks to the "Vista Capable" fiasco, that no marketing decision made inside of Windows is done in isolation.

IMHO, Tablet is likely to die a slow and ignominious death within Windows as it is absorbed into a larger "Natural input" movement. Note how touch, speech and visual recognition are the new darlings. Touch input is the only Windows-team-owned "darling". Microsoft's big challenge will be to figure out how to get Windows developers excited about NI as a whole.

I too am frustrated. The potential short term advancements in pen technology could and should revolutionize writing and use of the pen to replace the mouse and key board. I can tell you first hand that the cost of tablet pen implementation is less that $30 today.
Remember when you could not buy a cell phone with a camera? Now it is difficlut to buy one without a camera. The pen in a tablet solution should move down the same path. If every PC incorporated the technology at a $30 (or less) price tag and no predatory mark up by the OEM, we would see the momentum increase for Tablet. That being said, Microsoft needs to backup their beliefs with a firm commitment to the technology providers such that the cost, performance and ease of implementation progress rapidly. Microsoft is a black hole when it comes to stepping up to shape the industry.

Hilton is correct but let me add that MS executives have no vision or understanding of the pen. This appeared to be a Bill Gates interest and someone near the top was _not_ interested and therefore was blocking the development. My take was that there was a political fight in which the Tablet PC and UMPC lost. Clearly Bill Gates had little influence on the direction of the company. After a quick spike, all of the brains moved on to other projects and products. The Tablet PC, UMPC, and other pen products are not dead IF MS executives decided to revive the idea. Sadly, the IF is too big for small bandwidthed executives at MS to understand.

With that said --- A startup company, though, could blow away the market. It would take a huge burn rate for the first 12 months and plenty of blogger interactions to push the pen the right way - no hybrid keyboards, half written code for using the pen's advantage, etc. - But it is possible. The company would need software and hardware developers PLUS a team of evangelists who listened to the community and pushed to move the market quickly. Just look at the success of the ASUS Eee (missing the most important function!). More important, the product would have to scale properly from the consumer learning to use the pen up to the enthusiast pounding out emails, twitters, long documents, and interacting across different OSes.

There are plenty of smart people out there who would love to push the industry to new heights. Put a pen in the hands of a 5 year old and they know what to do ...

Thanks to shore who pointed out the grammatical errors, and thanks to whoever it was from the GBM team who corrected the title while I was sleeping :)

Doh - replace shore with those. That one was the TIP second guessing me!