Surface: Microsoft, Microsoft, Microsoft… WHAT are you thinking?

Well. We’re all clairvoyant, aren’t we?

What a clusterfluck that was.

Microsoft yesterday released a rather smart looking tablet device on the back of all the Windows 8 launch shenanigans. It looks wonderful. I haven’t had hands-on yet. Yet it’s already a substantial disappointment.

Let’s set aside the clear technological innovation. There is no debate there. Microsoft have outdone themselves. This is plain to see from a billion miles away. You just need to watch the various ‘making of’ Surface videos highlighting the touch keyboard accomplishments. Great job. Super work. Better — or at least on par — with what we’ve come to expect from the likes of Apple.

Forget that.

My problem is the market entry. My problem is excitement. My problem is price accessibility when the market has already been constructed.

There is, classically, nothing wrong with bringing out a device that looks to at least rival the iPad. (There are questions to answer by the way — battery life being an important one). But introducing it along the same price point is quite possibly the worst thing Microsoft could have done.

I’ve been banging on about this for some time. Price is incredibly important in the tablet market, especially given how many people already have a perfectly fine iPad — or a cheaper Android one (Nexus, Kindle Fire, Galaxy Tab… and, er, PlayBook — I still do see those around now and again!)

When the current market is saturated and is still heavily ‘owned’ in the mind by Apple, you need differentiation. The product does look phenomenal and there’s a big chance that it will impress on-the-ground. But that’s it. That’s what you’re competing on now Microsoft.

If you’d changed the pricing model — innofuckingvated — then you’d have a legion of people salivating, ready to pick up a Surface. Ready for the next generation.

Because, frankly, we are. The technical elite — that’s you and I, dear reader — are ready. We’ve done iPad. The last version was fine. The Retina display is lovely. The flipping stupid large battery, which increased the weight and thickness is not lovely. And the Apple iPad Mini… a clear statement of panic from a company that should, by all rights, be handing out sandpaper with every new Mini (see the Steve Jobs quote about 7″ tablets).

I think we’re ready for some serious competition in this marketplace. I think a lot of people would have bought the Surface “RT” (What the FLUCK does that mean, REALLY? COME ON!). I think about half the MIR readers would have logged on to Microsoft.com and purchased a Surface this morning if it was appropriately priced. There are a heck of a reasons why: 1) Experimentation, 2), it’s new, 3) it’s got Office, 4) so it’s basically a laptop, 5) or everything that’s missing from the iPad in terms of an enterprise function.

The moment that we all knew the entry level device was going for $499, we all switched off.

Oh there’s nothing WRONG with this. It’s just… well I’m fine, thank you very much. I’ll wait-n-see. I’ll look with interest at the plod in the office who buys one. I’ll do fake smiles at it and feel entirely content with my existing strategy. Unless, that is, the Surface begins to blow people away. That’s the company’s only hope.

What Microsoft needed was momentum. Huge momentum. They needed huge, huge stupid demand from people who don’t really need one. You’ve got an iPad, right? Of course you have. You either bought it yourself or the company bought it. Or you selected another tablet. You just had to. It’s you, dear reader, that Microsoft needed to go bonkers.

It’s you that they needed to appeal to.

Because from you comes the delicious momentum that the company needs to sustain forward excitement across it’s whole portfolio. Don’t forget Windows Phone 8. Don’t forget Windows 8. If you’re lusting after a Surface then you’re half way toward getting yourself a new Lumia 920. Because when you begin to see the integration between the devices you’ll start to recognise Another Way. We’re not in an Apple world any longer.

Except for the fact that Apple’s competitors can’t seem to innovate their way out of a wet paper bag.

The issue is price.

I’m thinking, for example, about my friend Tom. He works in technology. He used to work for a big operator before the incredulity of the company’s position became intolerable. So he’s exited mobile and is now working in technology in the travel industry. He bought an iPad. He’s the default Apple fan, actually. He got me into the whole thing years ago actually. He — obviously — owns an iPhone. He is not buying a Surface. He will have his head turned, yes. But he’s a sensible chap. And although Windows does hold a small place in his heart, he’s done, thank you very much. He’s content. He’s not that impressed by Apple, despite being a shareholder a while ago. He sees through the spin now.

And if you offered Tom an entry level Surface at $69/£69 up front and $26/£26 per month for 18 months — which comes with a free XBox subscription — I think he’d be on the site this morning ordering. Or, at the very least, he’d be in the departure lounge getting ready to board flight MS101 to Surfacetown. (My rough costs are based on $499 plus $50 for an XBox subscription, just an example).

That’s what Microsoft need: They need the Apple world to step into the departure lounge.

Now, let’s keep some perspective. It’s certainly possible that the Surface could sell a ton. I seriously hope they do. I’m just disappointed that there wasn’t an innovative model offered — something that Apple would never do. Going head to head is … fine. Fine.

We should also consider enterprise. For about twenty seconds. Unfortunately, Apple has had a silly amount of time to lock up enterprises rather dramatically. The iPad is now hugely pervasive. You only need to read about shopping chains dumping their existing cash registers and buying 10,000 iPads to get that message. The Surface will fit into the existing enterprise infrastructure nicely. Active Directory and all that jazz. However Apple has spent a good few years forcing — and I do mean FORCING — CIOs to radically alter their viewpoint to technology and “old” quaint technology like domains and such nonsense. The iPad forced everyone — at virtual gunpoint (i.e. the CEO telling you where to get off if you said no) — to change their mindset. So there is certainly room for some wholly enterprise compatible devices. I can see a good few companies evaluating and possibly deploying Surfaces.

It’s just… I’m disappointed we haven’t seen a huge, huge thrust from Microsoft. Pricing it in this manner than blowing a billion dollars to try and sell it (along with Windows 8) is certainly one way.

I’d have sooner seen it much easier to purchase. The fact people are having to think about it, rather than just snap one up, is a real pain.

Still. I think I’ll go and get one to take a look. ;-)

If you’ve got a few moments, I encourage you to have a read of these one-sentence opinions on the Surface from the MIR audience too — they’re brilliant.

Thoughts?

I’m off to get some caffeine and calm down.

,

  • http://stoli89.myopenid.com/ stoli89

    Unless MS is setting a benchmark and expects its army of OEM’s to make W8 business with their more than likely deeper product portfolio strategies (i.e. lower price points). Maybe MS is focusing its pricing strategy on the enterprise market and expects these strategic OEM’s to address the broader consumer market? I’m not convinced MS is willing to pull the plug on its OEM base. I think its trying to lead by example and limiting this exposure to corporate clients, where it has more direct influence and can more easily leverage bundled offers.

  • http://www.stuartbruce.biz/ Stuart Bruce

    Wow Ewan, why don’t you just say what you really think :-) Seriously, I totally agree with you. I want a new tablet and was waiting for the Surface to come out, almost certain that I’d buy one. But, I hadn’t expected Microsoft to get the pricing wrong. So now?

  • Andrew

    Microsoft have a bigger problem on their hands with Surface than the pricing. They should be more worried about the branding. Branding is the fatal error with the Surface concept.

    I find the constant comparisons between Microsoft and Apple get tedious and boring, but as Surface is clearly a reaction to iPad, unfortunately we need to go there.

    We’re in a platform war, in this war Apple has two franchises: OSX for laptops & desktops, and iOS for iPhones, iPads and iPod Touches. Out of there two franchises, iOS is clearly their dominant one. It’s a pub debate as to whether Apple’s success over the last 10 years is 95% or 99.9% due to the contribution of iPhones and iPads. The Macs are nice, but they shelter and grow under the halo effect from “post pc” mobile devices running iOS.

    In my simple take on Microsoft, I see them as having two basic platforms – standard desktop / laptop “classic” Windows that you interface with a mouse, and mobile “Metro style” tiled Windows that your interface with your fingers.

    In Microsoft Windows 8 land, laptops run “classic” Windows, (you can use them in “Metro” mode, but who will?), phones run “Metro” based Windows Phone 8, and the Surface tablet runs Metro on the RT version, and both Windows versions on the Windows Pro 8 version of Surface.

    Windows phones such as the Nokia Lumia’s and the Surface “Metro only” tablets are the sexy, growth part of Microsoft’s eco-system – Microsoft’s chance to get a slice of the runaway iPhone and iPad market that has eluded them to date.

    And here’s the problem. This key growth category of phones and tablets are branded “Windows”. This is a big mistake.

    Microsoft have done a great job with the Metro interface. It looks great, it looks modern, it looks fun and stylish. On a phone, it’s really easy to use. Arguably easier to use than an iPhone. On a tablet, I’m sure it will be similar. But Metro has no “windows”. Instead its based around “tiles”.

    By branding the mobile o/s “Windows” you signal to a new user they should project their past experience using PC based Windows onto the new mobile phone or tablet in their hand. Yet their past PC based Windows experience as no relevance to how they interact with a Metro based operating system. It makes the experience confusing. Going back to Apple, when iOS was launched with the first iPhone, they made no attempt to signal that using an iPhone is like using a Mac. In fact they did the opposite, emphasizing that using an iPhone was a new experience unlike using any other a person may have had with a prior consumer electronics device. Apple signaled to consumers that an iPhones was a beautiful new world of user experience never before seen by mere mortals. Who wouldn’t want to try that out?

    On the other hand, “Windows” as a brand has baggage. I’d wager that for potential phone and / or tablet buyers – i.e. your average consumer electronic consumers, their sentiment towards “Windows” as a brand is at best neutral and at worse negative. What does your average punter think about when someone mentions “Windows”? Being at work in an office? The clunky work laptop that takes 30 minutes to boot? The malware ridden XP biohazard they or their parents own or once owned? It’s just not a brand that projects simplicity, enjoyability, fun, great design, style, being cool etc – all the things that come across in an Apple iPhone or iPad campaign.

    Did the phones and tablets need to be called Windows? Microsoft have their Xbox brand franchise (as opposed to “Windows Gaming Edition), and even showed foresight to brand the tablets as “Surface” (as opposed to “Windows Tablet”)

    And that’s the tragedy. Microsoft has built bold, great, fun, easy to use software with its Metro line. The new software should give them a strong chance to transition from the declining PC market towards the growth phone and tablet growth markets. Yet the decision to stick with the Windows brand will be a drag on their ability to drive trial and takeup of these devices with a public who use Apple as the benchmark in this category.

    Would it have killed Microsoft to signal a break from the past and label their mobile and tablet software something else other than Windows? My tip would have been to pay off whoever owns the Metro brand as Metro was used as the development name of the software. Its nice name and signals something modern and stylish.

    Unfortunately Microsoft won’t re-brand because Microsoft sees the Windows franchise as their jewel in the crown. Their strategy is to use Windows 8 in all its guises as a way of re-booting the Windows franchise for a new generation.

    The risk is that the consumer market will reject Microsoft’s attempts to a refresh their attitudes to the Windows brand. Windows as a brand may already be dead to them, and there is no chance of resurrecting it. Their negative attitude to the brand may act as a blocking factor to them trialling or considering a Metro phone or tablet.

    The Windows brand should be kept for corporate customers where the brand carries reassurance. It should be killed off as far as possible (and as soon as possible) for consumer customers where it carries negative baggage.

    If Microsoft fail with Surface, the primary cause will be a major flaw in their branding strategy. Apple talk about the computing ecosystem moving into a “post PC” universe, and their success with phones and tablets seems to confirm their view. So why on earth would you choose to use PC era branding in a post PC world?

  • http://twitter.com/najeebster Najeeb Khan

    I’d like to gently challenge your exasperation Ewan :-)

    (1) Note that MSFT have priced their 32Gb and 64GB configurations like for like with iPad.
    But they could argue that they include $100 Touch Cover in the bundle AND $100 MSFT Office software in the price making their offer better value for money.
    They are emphasising productivity in their marketing and at this stage the Surface seems better equipped for that than an iPad.

    (2) A 64GB Surface +Type Cover (proper keyboard) costs £670.
    At this stage it’s unknown how many decent apps will be available for Windows 8 RT at launch;let’s assume that MSFT have done paid up and got a pretty decent smattering of essential launch apps that most of us would need.
    Compare the top end Surface +Type Cover to price of entry level Mac Book Air (112 screen = 64GB storage) – £850
    I’d say that compares quite decently.
    Neither machine would be the only computing device for most people – rather it would serve as the travel companion for productivity.
    Both have USB and video out capabilities.
    The entry level MBA doesn’t have expandable storage whilst the Surface has Micro SD.

  • Randomer

    Ewan, on other posts you complain about MS possibly stepping out of their traditional role by making a phone, althought you then also say that you understood the idea with Surface tablets. Situation here isn’t actually that different. Yes it would have been good for Surface sales, sales of this particular brand, but MS is trying to make money out of SW and it isn’t in its interest to piss OEMs off by competing with them in that way. Only some of them could offer similar subsidy / part payment scheme, making it hard for smaller or even some big manufacturers to compete. MS wouldn’t want to take responsibility to subsidize every manufacturer’s tablets like that.

    What MS is interested about, is to give a high quality alternative to iPad and that it exactly what Surface has
    now given. Android land of lower end tablets can be competed with other
    models from other manufacturers. Payment systems like the one you
    suggested should be left mainly, apart from xBox part which would
    require MS’s co-operation, to mobile carriers or Tesco’s, or if they so
    want, to other manufacturers.

    This isn’t something companies would care about anyway, they _will_ buy W8 tablets. With this I predict even brighter future than you do.
    There is very few reasons for them to choose iPad if W8 tablets are
    available. Companies can buy the x86 version if they want and everything
    existing will work perfectly. Even with RT I don’t think lack of
    business software will be a problem compared to iPad. If it exists for iPad it will be soon avalable for RT. You don’t often hear the phrase “Nah, we won’t develop for a MS platform because there is no corporate customers.”

  • http://www.mobileindustryreview.com Ewan

    I still think the Surface has a good chance of success. I’m just saying that there was a significant opportunity to wrong foot the rest of the market. Bring it on Microsoft. I am looking forward to seeing one in the flesh!

  • http://twitter.com/chrisl_j Chris Lewis-Jones

    I’m usually always on your side Ewan but sure I am this time! For three main reasons:

    1. Consumer mindset. Tablet consumers are so used to the premium price of apple products that they don’t really see it as a premium anymore. As such the ‘well, a decent tablet costs £400+ that’s just the way it is’mindset is already firmly established. We haven’t seen a 10″ Android tablet come to market at a sub £250 price point that is even remotely comparable to the ipad so why should your average ‘in market’ tablet buyer think a Win8 tablet is going to be any different? Regardless of the hollering from the likes of us that such a device would bring! As such I think there is an argument to say that Microsoft needs to price it on a par with the ipad because it gets them into consideration (assuming the product is properly decent, and from the plays I’ve had on Wn8 tablets I reckon it will be) and I think getting on to the consideration list the best they can hope for at the moment.

    Ok, but is this really good enough? Is just being considered really going to help break Apple’s dominance? No, certainly not in the short term but then this is an incredibly young market Relate it to the automotive sector, sure Ford is still a massive player but it’s not like the Model T has ensured utter dominance – granted tech moves somewhat quicker these days(!) but still a valid comparison. With the sheen slowing coming off the Apple brand thanks to the likes of Maps, getting into consideration could prove a vital platform to move forward.

    2. The tablet market is splitting. Into two distinct sectors, the high-end, 10″+ devices a la ipad and the cheaper, potentially more mass market 7″ sector. There are numerous factors contributing to this, price point and the screen size of the current crop of high-end handsets (all significantly bigger than the phones that spawned them, I’m thinking 920, S3, iphone 5) being two of the key ones. If Win8 is going to make a play in the high-end sector Microsoft has got to make it clear that is where the Surface is aimed.

    Isn’t this why we’re about to see the ipad mini?

    3. For Win8 to succeed in the tablet space Microsoft are going to need to heavily rely on other players like Samsung, HTC and maybe even Nokia! If the surface, as the first available Win8 tablet, came into the market sub £200 and blew the proverbial doors off what incentive is there for the others to put significant weight behind the platform? Granted it could cause a complete shift in the market, bringing the split back together and forcing Apple to radically rethink their strategy but it will be the same for everyone else, including those teeing up Win8 products. If you were a Samsung or similar surely you’d rather have two bites at the cherry that a split market offers? Especially if the former means significantly reduced profit margins. All the effort to get these guys to divert budget and resource away from Android would be nullified, plus I’m not convinced that hardware success is really Microsoft’s end game.

    For sure it means we’re not going to see the sort of seismic shift in the sector that we’re craving but given the huge scale Win8 will naturally deliver the smart play for significant share in the ecosystem war that is growing to include the living room and eventually the home, car and everything else is a longer one than we’d like. So…I’m going to try and be patient!

  • http://www.marczewski.me.uk/ Andrzej Marczewski

    Torn by this. If they had set the entry price about $399, this conversation would never happen. It is very interesting from an enterprise point of view – a tablet that basically runs everything your PC can run – fab. But, for that price I can can by and actual laptop that has a better spec and have a nexus 7 on top!

  • http://www.mobileindustryreview.com Ewan

    Aye and we do need to be careful assuming it’s going to ‘run everything’ because of the whole Windows RT shebang.

  • http://www.marczewski.me.uk/ Andrzej Marczewski

    Ah true – will we be seeing windows ce v2 :D

  • http://www.mobileindustryreview.com Ewan

    Geez I hope not!

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