According to reports leading up to the introduction of the debut of the latest Surface from Microsoft, the company was planning to add a smaller device to its small family of tablets aspiring to substitute for laptops.
And according to reports that followed that introduction, those plans were scuttled pretty late in the game. Indeed, Microsoft went in a completely contrary direction to the one expected, delivering their largest Surface device to date as measured by screen size, and indeed one of the largest tablets in the market from a major vendor alongside Samsung’s Galaxy Tab Pro and Note Pro 12 that shares “Pro” branding with the latest Surface.
Regardless of whether Microsoft’s small tablet efforts have been stalled or halted for the time being, it’s easy to see why the company offering a smaller version of the Surface would seem like a natural move. In general, we’ve been seeing a widespread move to smaller tablets, the lower prices of which can help to expand market share or at least pave the way for new entrants.
In particular, as we saw at the Surface launch, the Surface team seems competitively focused on the MacBook/iPad combination (for good reason due to its market leadership) and not having a challenger to the iPad mini represents a competitive gap. Indeed, the pairing of a MacBook Air and iPad mini seem less redundant than the MacBook/iPad Air combo against which Microsoft positioned Surface.
As made evident by the recent introduction fo a $99 Android tablet from HP, the small tablet market has become, with few exceptions a quicksand into which margins get sucked.
Some of Surface’s best assets stem from the integration with its Type Cover keyboard accessory and support for classic Windows applications like Office. Indeed, one of the apps Microsoft highlighted at the Surface introduction was Photoshop, perhaps the most popular of professional creative tools and one at home on a large “canvas.” Surely Microsoft could design a keyboard cover for an 8” device as Logitech and others have done for the iPad mini, but it would be compromised and almost surely have to axe the trackpad that received much attention in this update.
As both Microsoft CEO Satya Nadella and Surface head Panos Panay made clear, productivity is a mantra of the Surface team and is necessary to support the premium pricing of the Surface Pro versus many other tablets (but not versus laptops). Other traditional features of the Surface, such as support for USB and a wide range of printers, are simply things that are used less on a smaller content-consumption device.
Nadella also made clear that Microsoft has no interest in competing with its Windows OEMs, a severe restriction on a company that was once aiming to be defined in part by devices, and a difference of at least a shade from the launch of the Surface Pro 2 when Microsoft accepted that it would compete. Despite the stated intention, many of the scenarios that Microsoft highlighted during the Surface Pro 3 introduction were certainly ones in which Surfaces might displace products from HP, Dell and Lenovo. Or perhaps the simple newness of the 8” Windows tablet space is such that Microsoft feels that it needs to allow licensees a little breathing room.
To differentiate from the 10” iPad and larger Android tablets, Microsoft chose to extend the tablet’s form factor with a kickstand and keyboard and to tie it to the legacy of an operating system that has historically operated on displays that were typically no smaller than 11”. The iPad mini can command a high premium over other tablets because of the maturity and strength of its ecosystem. But for now, a smaller Surface would likely thrust Microsoft into a low-margin market that doesn’t play to its strengths and puts a further squeeze on its partners.
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