Surface to help shoppers navigate at AT&T stores

Microsoft won genuine "wows" from technology enthusiasts when it unveiled a touch-controlled computer embedded in a sleek coffee table 10 months ago.

Bill Gates has demonstrated the device, called Surface, at marquee company events, and Microsoft's partners have had warm receptions for their prototype applications.

While the combination of cameras, projectors and computers is impressive, questions remain about the marketing and business models for Surface — a new and as-yet unproved category.

"The product is absolutely stunning," said David Daoud, an analyst with IDC. "Microsoft certainly deserves applause for all of that. Going to market is a different ballgame."

Surface will be released into the wild April 17 as a point-of-sale display for handsets at five AT&T stores, the companies plan to announce at an industry event in Las Vegas today.

This first, modest commercial deployment comes about four months later than Microsoft had hoped. And AT&T is not one of the original partners Microsoft touted when it unveiled Surface late last May.

AT&T will put several Surfaces in stores near San Francisco, San Antonio, Atlanta and New York City. The displays will allow shoppers to use gestures to navigate through maps of the cellular provider's coverage area, review service plans and compare the features of eight high-end handsets by placing the products on Surface. Apple's iPhone, a touch-screen device that debuted last year, won't be one of them.

"They [Surface units] are going to be an integral part of our sales process," said Andy Austin, director of AT&T's retail-customer experience.

Each store will have several units and all the transactions in the store should make use of Surface, he said.

For the past year and a half, AT&T has been pushing more technology into its more than 2,200 U.S. stores to help customers decode the myriad options in wireless phones and services, he said.

Austin said AT&T has planned additional applications, including using Surface to equip phones with ringtones and service plans, as well as deploying it to more stores. But first it will evaluate how customers react to the pilot program and whether it helps build a connection with AT&T's brand.

Daoud said AT&T and others considering Surface will be interested in its return on investment. "Obviously, for AT&T, it's selling more phones and services," he said.

Microsoft has demonstrated a point-of-sale application similar to what AT&T is rolling out for Bellevue-based T-Mobile USA, one of the partners announced last year.

T-Mobile, in an e-mailed statement, said the company is "continuing to explore ways Microsoft Surface can be best utilized at our retail stores for a great customer experience." It declined to provide details on when Surface could appear.

Other Surface partners are moving ahead with their plans, but the going is slow.

International Game Technology, a builder and distributor of gambling products, showed some of its concepts for Surface to potential customers at a conference in November, said Ed Rogich, vice president of marketing.

"There is a marketplace," he said. "We think it's a great technology and it was enthusiastically embraced by the customers who saw it."

Possible applications include electronic versions of table games such as Blackjack for markets where live dealers are not allowed, Rogich said. He wouldn't estimate when IGT's adaptations of Surface for gambling would be available.

Sheraton Hotels and Harrah's Entertainment, two other initial partners, did not respond to requests for updates.

Microsoft expects more Surface announcements "in the coming months," said Kyle Warnick, group marketing manager for Surface. "It's a new category," he said, explaining the delay.

Also, Microsoft's partners want deeper integration of Surface with their businesses than originally forecast, which is taking more time, Warnick said.

Matt Rosoff, an analyst with Kirkland-based Directions on Microsoft, said the company wants to control the experience of Surface to make sure it is high quality.

"It's not a typical Microsoft product," he said. "It's a very niche-market, low-volume product, and the typical Microsoft product is exactly the opposite."

All along, Microsoft executives — including CEO Steve Ballmer earlier this year — have talked up the interest the company is getting for a consumer version of Surface. Microsoft has said the device in its current form would cost $5,000 to $10,000.

Last month, Tom Gibbons, a vice president in charge of specialized devices and applications, told Fortune magazine an affordable consumer version may be three years away.

Warnick hedged, saying, "We're definitely looking at the consumer space and see that in probably three to five years there is an opportunity for Surface to go to the home."

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com