Will Microsoft get the new Surface(s) right? Part 1

It appears that on May 20th Microsoft will announce at least one new member of the Surface family, most likely a Surface Mini (aka 7-8″ class device).  The rumors have heated up suggesting that there will actually be two or more new Surface devices introduced.  Now that would be exciting!

From my perspective this is pretty much the make or break announcement for the Surface line.  The Surface/Surface 2/Surface Pro/Surface Pro 2 generation of devices grew out of Microsoft’s pre-Windows 8 launch thinking.  Yes the 2s are the same generation as the originals, nicely upgraded but still based on the original design center.  Whatever we see on the 20th are the first devices that could have been seriously impacted by what Microsoft learned from the Windows 8 and Surface launch experience.  The first that could have a different design center.  And the first where new CEO Satya Nadella can influence the pricing and positioning (though not the designs themselves).

Part of Microsoft’s problem with the original Surface was its schizophrenic positioning.  Was this a content consumption device positioned against the iPad or a content creation device positioned against the MacBook Air and Ultrabooks?  I discussed positioning in my original “review” of the Surface, which didn’t get to the marketing side of things.  What Microsoft tried to do initially was position the Surface as a content consumption device and the Surface Pro as more of a content creation device.  They missed the mark on both.

The Surface didn’t find acceptance as a content consumption device for two major (and a few modest/minor) reasons.  First, it was considerably overpriced.   Microsoft thought they had a lot of value in the device that consumers didn’t see.  Second, the device had no apps.  By basing the Surface on an ARM processor, thus limiting it to only new Windows Store apps, Microsoft had created a version of the “Which came first, the Chicken or the Egg?” problem for itself.  They could have broken through by pricing the Surface aggressively to drive sales volume that created a pull on app developers.  But they didn’t.  Consumers stayed away.

Where the Surface showed some promise, and did gain traction after last fall’s price drop, was amongst people who needed a Microsoft Office-centric productivity tablet.  Basically something even more into the Content Creation space than Microsoft’s original positioning.  Unfortunately Microsoft was slow to follow-up on that limited success and has kept the Surface 2 priced much too high to build on last fall’s traction with the original Surface.  It has been overpriced by at least $100.  A Surface 2 with the Touch Cover for $399 would be a compelling offering.  But at $530 it is a non-starter.  And the pricing of the LTE model is outrageously non-competitive.

The ARM-based Surface continues to face the problem of a weak app library.  My most recent example is the lack of a Windows Store app for Amazon Instant Video, meaning I can’t take my Amazon content offline.  So on my expensive Surface I couldn’t download my Amazon videos to watch on the airplane, but on my inexpensive x86-based Dell Venue 8 Pro I could (because I could install the desktop Amazon Unbox video app).  I left the Surface at home.

High price, lack of consumption apps, and a myriad of more modest consumer disconnects (e.g., the bet on a 16:9 aspect ratio hasn’t paid off, very late delivery of LTE support) doomed the Surface/Surface 2.

The Surface Pro/Surface Pro 2 is more of a success story.  It offers an amazing set of capabilities in a small package.  Unfortunately it is too thick and heavy for use as a primary tablet, and has too small a screen for most people to accept as a primary Content Creation device.  So it is a niche product for those desiring a secondary Content Creation device with good Content Consumption capabilities.  If Microsoft had gotten the thickness and weight down with the Surface Pro 2, and priced it just a little more aggressively, they could have had a smash hit.

Unfortunately Microsoft botched the rollout of both the Surface Pro and Surface Pro 2.   In the case of the original Surface Pro they prioritized shipping the Surface first, even though the Surface Pro would have been an instant success and driven Windows Store app development.  By the time the Surface Pro shipped it was tarnished by the poor acceptance of the Surface and poor battery life associated with a dated processor that had already been superseded in Intel’s family.  In the case of the Surface Pro 2 they had availability problems, and then failed to deliver critical accessories, such as its docking station and the power keyboard cover, in a timely fashion.  Thus despite having a solid product, Microsoft simply botched the opportunity.

In Part 2 I’ll discuss a new design center for Surface and suggest what I’m looking for in the next set of products they introduce.

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14 Responses to Will Microsoft get the new Surface(s) right? Part 1

  1. JimmyFal says:

    “A Surface 2 with the Touch Cover for $399 would be a compelling offering.” One key is if you’re going to make this many mis-steps, you better learn and deliver from those mistakes, don’t keep botching it over and over. This form factor with the kickstand and keyboard is such a winner, they need to give compelling price based reason’s for people to buy. NOW.

  2. Gareth says:

    Sadly everything you say is right on. Pricing t at the same level of the Apple’s devices makes it an extremely tough sale the breadth of ecosystem versus iOS.

    Can only hope they’ve got this figured out for wave 3… (… before the wavering at best developer interest in ‘Modern’ recedes completely)

  3. dave says:

    Hal –

    You summary analysis is spot.
    Price, form and function were all off. Price was reduced, but by too little and too late. Form was “too big” for a tablet, and too small for a laptop. Function was hindered by lack of touch friendly apps.

    MSFT has a chance to fix all three of these variables.

    I am most curious to learn if/how the Nokia tablet is addressed. Design-wise, if has a better form for a tablet.

    • halberenson says:

      What shocked me most was that after showing a lower price point worked with last falls Surface RT price reduction, they didn’t lower the price of the Surface 2.

  4. Brian says:

    And, it took a long time before Microsoft highlighted the educational market in its Surface advertising. Microsoft should have pushed the RT version to parents as the ideal “kid needs to be able to run Office and to access Facebook/Tumblr/Instagram/YouTube” (without getting infected by some social engineering site)” device.

    I can’t believe that Surface took all the beating it got (mostly because of a lack of “apps”) from folks who push Chromebooks as a solution. A lower price point and a push as the ideal “kid’s computer” would have made a big difference.

    • halberenson says:

      Perfect example of how poor marketing (in all its dimensions) doomed a pretty great piece of hardware.

      • Steve says:

        > doomed a pretty great piece of hardware.

        Let’s stay honest. Original Surface RT was not a “pretty great piece of hardware.” It was a really, really crappy but extremely overhyped device with an intentionally crippled and immature operating system. Pricing (especially w/out keyboard) was an insult, the fixed kickstand made it almost unusable for everyone over 1.75 m (i.e. most European men), performance was extremely bad, battery management was a mess (still is), and let’ not forget that most people hate Windows 8 (touch and desktop). Selling them at a low price (after nobody wanted them before) was classic Microsoft but a huge mistake (classic Microsoft thinking being: “if people don’t want our product, let’s cut the price or give them more of it for the same price, maybe then they will? Why would we change the product?”). Microsoft should have buried the over-production of Surfaces somewhere in the desert than sell them at a low price. Every single customer who purchased one was most likely very, very disappointed and will not purchase another Surface again.

        Surface is a perfect example of what happens when Microsoft tries to best a competitor whose value prop it doesn’t understand. Let’s all hope this is behind us. Sinofsky has most likely done more harm to Microsoft than anyone else before him, including the EU.

        • Steve says:

          Note: Sorry, I am a frustrated MS FTE, Please excuse my ranting, didn’t mean to insult anyone…(except maybe SteveSi)…

          • halberenson says:

            Actually, I know a lot of very satisfied Surface owners!

            • Avro says:

              Surely not “a lot”.

              • halberenson says:

                True 🙂

                Most people I know who got one, and I know an unusual number of people with Surfaces because of all my MS friends, fall into this category. And I’ve had non-MS people comment when they saw me using mine. So I think satisfaction is high amongst the modest number of people who have them.

              • JimmyFal says:

                Avro, I can assure you I know a LOT of people that LOVE their Surfaces. Most of these people are not trying to do a direct comparison to iPad, most of these people are in love with the form factor, kickstand, keyboard, and ability to have Office on the tablet, as well as USB, printing, Flash, and all kinds of stuff that iPad lacks.

                I would not fault anyone however for complaining; and rightly so, that the Surface RT as it comes from any store today, is a pain in the ass to get setup, because you have to update it all the way from Windows 8.0, which was unfinished and unready, to 8.1. And NO WHERE does it walk the poor end user that doesn’t know any better through this process. Not even a little piece of paper informing you to update? WTF?

                The device is not quite as idiot proof as an iPad, but were not all in need of such hand holding, and I am willing to bet that if iPads had this keyboard, this mouse pad ( to reach those annoying hover points on websites?), and this kickstand, that 99% of users would use them.

                • avro105 says:

                  “in love with the form factor, kickstand, keyboard, and ability to have Office on the tablet, as well as USB, printing, Flash, and all kinds of stuff that iPad lacks.”

                  I think you are wearing blinkers.

                  Office on the iPad is extremely nice and the iPad has had the ability to print for years. The problem is that hardly anyone is in love with those other things. Flash? No, kickstand? No, USB? No.

                  I use my iPad for productivity only and will probably buy a keyboard cover for the next one although my Bluetooth keyboard works just fine.

                  Microsoft should stick to software. That is what it does best. It doesn’t do sexy hardware and should leave it to Apple.

  5. Max Wild says:

    Please add me to the list of very satisfied users of the Surface RT Mk1! The only app missing is from the BBC. There is one for the Lumia phones but not for Windows 8.1 which is very odd given the increasing number of PCs, Laptops and tablets running 8.1.

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