Microsoft's Surface Pro highlights flawed two-for-one strategy
Microsoft has never disguised the fact that the Surface Pro would be a tablet with ultrabook characteristics, or sell at a price commensurate with ultrabooks'. In June, when the company surprised the industry, including its OEM partners, by introducing its own hardware, it said that the Surface Pro would sell for about the same as Intel-powered ultrabooks, whose prices have hovered at $1,000 and beyond.
The problem for Microsoft is that the outlook for ultrabooks, which the Surface Pro emulates, is dim. Windows ultrabook sales have been disappointing this year, and show little sign of improving sans dramatic price cuts. Such a move, failing similar discounts by Microsoft, would leave the Surface Pro high (in price) and dry.
In October, IHS iSuppli downgraded its estimate of 2012's ultrabook sales, cutting its projections by more than half from 22 million to 10.3 million, citing too-high prices. iSuppli argued that sales won't take off until prices fall toward the $600 bar, perhaps in 2013.
"Surface Pro is really a PC, and potential buyers will also be considering notebooks and ultrabooks," noted Moorhead.
Even without the current sales issues with ultrabooks, Microsoft's strategy of putting two devices into a single chassis may have little chance. By trying to make Windows 8 all things to all people -- and make it fit for use in a wider range of devices -- Microsoft has set itself a bar that will be very tough to jump considering the current state of computing.
"The real question is, 'What is the point of a two-in-one device or touchscreen PC?'" said Singh. "Legacy applications are not touch optimized, so using them on a Surface Pro, even with a Touch/Type Cover, is a sub-optimal experience compared to a traditional laptop."
And while the app count in the Windows Store -- the sole source of Windows 8 and Windows RT tile-style software -- has climbed dramatically, Microsoft is still working with a handicap.
"Windows 8 doesn't really offer a vibrant app ecosystem, at least for now, that takes advantage of touchscreen capabilities," argued Singh. "So the touchscreen is basically an additional expense with little to no practical use for x86-based devices."
That means that the Surface Pro must succeed as an ultrabook first and foremost, agreed analysts. "If the Surface doesn't sell as a PC that can manifest itself as a tablet, then it's nowhere," said Gottheil.
In fact, few experts give the Surface Pro much of a chance of selling in any appreciable number. By extension, that means there's little chance for Microsoft to break out of the flagging PC business to a wider product constituency of tablets, or to create a viable two-in-one category.
"At the end of the day, Microsoft's problems with the Surface and Windows 8 have been caused by a flawed mobile strategy," asserted Singh. "Microsoft sees the tablet as an extension of the PC, but doesn't seem to understand the fact that the gap between touch-optimized and non-touch-optimized applications renders that logic invalid. Microsoft is attempting to position the Surface Pro as a laptop/PC replacement but unfortunately, replacing a PC doesn't seem to be necessity anymore."
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is firstname.lastname@example.org.
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