So far, sales of Surface and other Windows 8 devices have been lackluster. After the Windows 8 launch on Oct. 26, Surface RT devices were available only in Microsoft Stores and on Microsoft.com, but in mid-December, after realizing that making Surface "exclusive" was counterproductive, Microsoft chose to expand Surface to other retail outlets like Best Buy and Staples. Perhaps this expansion, as well as the availability of Surface Pro devices running the full-bore Windows 8 Professional version in late January, will boost sales in the coming months.
But whether Surface becomes a flagship product or a flash in the pan, analysts agree that it has done damage to Microsoft's relationship with hardware partners.
"Microsoft has a long history with OEMs, so some see the Surface as a betrayal," says Miller.
Kay agrees, stressing that the tarnished relationship between Microsoft and its hardware partners was apparent in the weeks following the Windows 8 launch.
"You could tell things were out of sorts when there was a lack of hardware in retail-- and no coordination among OEMs at Best Buy and the Microsoft Store," he says. "I think it's because Microsoft turned on partners without much warning."
The Surface does have appealing features such as an elegant hardware design and ClearType high-resolution display, a nifty keyboard/cover and the inclusion of Microsoft Office, but the Windows App Store remains low on quality apps compared to iOS and Android, and right now there is "poor ecosystem leadership at Microsoft," says Kay.
In Microsoft's defense, the Windows Store now has 20,000 apps, quadrupling its size since the Windows 8 launch in October. But availability of blockbuster apps is still hit-or-miss.
"The reality is that Apple has the consumer locked and hardware partners are choosing Android over Windows," he says. "For so long, Microsoft was the one, but the company will have to get used to being one of many."
Windows 8 Will Keep Microsoft in the Game (But it Won't Be Easy)
The days of Windows dominance may be waning, but according to Forrester Research senior analyst David Johnson, Windows 8 will still keep Microsoft in the enterprise and consumer games in 2013.
Despite being a late entry in the mobile market with fewer apps and higher resource requirements than iOS and Android, Windows 8 still has big advantages even with its two-headed user interface, notes Johnson.