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Crunch time for lost Microsoft Surface
Posted on 9-Aug-2014 14:54 by Bill Bennett. | Tags Filed under: News.

As Microsoft prepares to launch the Surface Pro 3 in New Zealand, overseas news services report the company may pull the plug on its tablet.

Gregg Keizer at Computerworld says Microsoft’s Surface has lost money every quarter since first appearing in 2012. To date, the total loss is close to US$2 billion.

Keizer quotes Jackdaw Research analyst Jan Dawson, who says: “Continued losses will make it harder and harder for Microsoft to keep the Surface project going, so a good performance in the next quarter or two will be critical to justifying its continued existence”.

Comments from Microsoft CEO Satya Nadella hint at his impatience with Surface. In July he said: “We are not in the hardware for hardware sake and the first-party device portfolio will be aligned to our strategic direction as the productivity and platform company”.

Surface was a huge gamble on Microsoft’s part. Apart from anything else, moving into hardware alienated the company’s traditional partners like HP, Dell and Toshiba. Because Surface is essentially a tablet with laptop-like characteristics, there was a risk it would undermine the entire Windows PC market. The jury is still out on that one.

When I looked at the Surface Pro 2 last year, I concluded it doesn’t compete directly with Apple’s iPad but it is a credible alternative for business users.

Surface is especially suited to those who rely on Microsoft Office and other Windows software. It’s nicely made and a pleasure to use. However, with Surface Pro prices starting at NZ$1300, it’s expensive compared to the iPad — although good value by laptop standards.

And there’s the problem. Surface sits somewhere between an iPad-like tablet and a traditional laptop. Or perhaps, given the financial evidence, we should say it is lost somewhere between a tablet and a laptop.

Filed under: Microsoft Tagged: Surface, tablets

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