Will big-screen iPads kill off Microsoft's Surface tablets?

There's more bad news for Microsoft's struggling line of Surface tablets: Apple is said to be working on a 13-inch iPad that could be used as a productivity device, not just for entertainment. If true, it could just about kill off any chance the Surface has for success.

The Wall Street Journal reports that Apple has asked its suppliers for prototypes and designs of 13-inch screens for its iPad. The current iPad sports a 9.7-inch screen.

At that size, it's not likely that users will merely want to run apps, check email, and watch video. A 13-incher would certainly cost more than a 9.7-inch iPad, which already comes with a premium price tag. Instead, it would likely be a "two-in-one" device, that is, do double-duty as a tablet and a laptop. Patrick Moorhead, principal analyst with Moor Insights & Strategy told Computerworld:

"A 13-in. iPad would be an improved productivity device, particularly when connected by a wireless keyboard, [and] would be like a Windows 8 detachable. he improvement in content creation and editing [would come from] being able to see more of the content."

Ezra Gottheil, an analyst with Technology Business Research, concurs, and said that he sees such a tablet as bridging the gap between an iPad and the more expensive Macbook Air. He told Computerworld:

"A 13-in. [iPad] would only make sense if it came with a clamshell design and a detachable screen, as a piece of glass that big needs securing," said Milanesi via email. "But it also implies a use case more similar to a notebook, [that] basically you sit down more than walk around with it."

Sound familiar? It should. It perfectly describes Microsoft's Surface line of RT-based and Windows 8-based tablets, which are designed to work both at tablets and laptops with detachable keyboards.

Surface sales have tanked, and Microsoft recently had to write off $900 million because of unsold RT-based Surface tablets. Microsoft hasn't announced sales numbers for its Windows 8-based Surface Pro tablets, but by all accounts they haven't been selling well, either.

Microsoft's strategy for the Surface for now seems to be to withhold releasing a version of Office for the iPad, in the hopes that it will spur people to buy Surface tablets instead. Clearly, that hasn't worked. Continuing to do that could ultimately hurt Office revenue. J.P. Gownder, a principal analyst at Forrester Research, claims in a blog that an Office version of the iPad could bring Microsoft an additional $1.4 billion, assuming that 10% of the more than 140 million iPad users bought Office for $100. That's a big number, and likely an inaccurate one. It's doubtful that 10% of iPad users would opt to buy Office. Still, there's money to be made by releasing an iPad version of Office.

And not releasing an iPad version of Office could could ultimately reduce Office revenue, as people get used to Office alternatives, and abandon them on their computers because they use Office alternatives on the iPad. Gowdner writes (the bold-faced emphasis is his):

"By ceding ground to competing apps, Microsoft is encouraging users to investigate other platforms. For workers and consumers, Apple’s iWork and QuickOffice Pro HD (now owned by Google) offer strong functionality with touch-first user interfaces. (Some people are even writing novels on iPads). More specialized programs like Evernote and Slideshark fill the niches for composition/note-taking and slide presentations respectively. Meanwhile, enterprises create new custom iOS and Android apps to accomplish business-specific productivity tasks.

"The bottom line is that "protecting" Windows RT by keeping Office off of Apple's iPad and Android tablets isn't working. It's instead creating risk for Office as users find other ways of getting things done."

If Microsoft keeps on its current course, a 13-inch iPad will be a double whammy: Possibly killing off the Surface line, and also getting people used to Office alternatives, and so eating into Office revenue as well. At a minimum, Microsoft should release an iPad version of Office, to protect the productivity suite. At a maximum, it should build a higher-value line of Surface tablets that cost less and deliver more.

Copyright © 2013 IDG Communications, Inc.

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