I surveyed thousands of IT professionals who attended one of the 30 Angelbeat events held so far in 2012, asking if they wanted Microsoft as a viable competitor to Apple and Google in the tablet and smartphone space. Angelbeat attendees are widely respected/known for their technical expertise and vendor knowledge, with many also admitting to a healthy skepticism of Microsoft. Interesting enough over 96% still wanted Microsoft to be a strong competitor; virtually no one was comfortable with today’s Apple/Google duopoly. Obviously a far cry from just 10-12 years ago, with global antitrust lawsuits against Microsoft and their apparent global monopoly.

This should be welcome news in Redmond. So what should Ballmer and his team do now? I held some additional conference calls with Angelbeat attendees. Here is a summary of their projections for the next 6 months, and how Microsoft will or perhaps should respond in 2013.

Microsoft’s main competing products will be Nokia Window Phones, Ultrabooks by Samsung, HP and others, plus Microsoft’s own Surface Tablet this fall. Unfortunately no one is optimistic about 2012 sales.

Most believe that Nokia will go the way of Palm and RIM, i.e. disappear. Combined with Nokia’s lack of availability through Verizon Wireless, the general consensus is to wait until Microsoft launches its own phone. Everyone sees it coming, just a matter of time. They also felt the Surface tablet announcement was a strategic mistake because of its impact on the smartphone market. Microsoft could have emerged as the smartphone platform of choice for manufacturers – HTC, Samsung, etc. – who use Google-owned Android for most of their devices, but may have concerns about competing with Google-owned Motorola products.

Ultrabooks, offering the best laptop experience while still being able to function as a touchscreen tablet, were created to compete against both the Mac AirBook and iPad. This a great product but sales have been negligible to date. Given the Surface announcement and strategy – offering the best tablet experience while still being able to function as as laptop with a physical keyboard – ultrabook sales will likely go from bad to worse. No one knows much about the Surface. It could be great but given iPads, Kindles, Nexus and other devices already out there, it is highly unlikely that the Surface will be a Christmas sensation like the XBox Kinect.

So now it is early 2013, Redmond is experiencing another lackluster Christmas, while Google and Apple are further increasing their market share/industry dominance. The group’s two-fold recommendation to Ballmer is:

Offer Windows Phones under the Microsoft brand for free, with a guaranteed two year contract and built-in/required Bing search. Use advertising and search-based revenues to drive smartphone usage.

Offer Surface Tablets at a $99 price point, with built-in/required Bing search. Again use advertising and search-based revenues to drive Tablet usage. Remember, it worked for HP when they were selling their playbooks.

Let’s remember that Microsoft spent $10 billion to acquire Skype, and just wrote off $6 billion from its online advertising acquisition from just a few years ago. Instead of spending billions and billions on uncertainty acquisition, Microsoft should use its cash reserves and great products to establish a presence in the smartphone and tablet markets, before it is too late.