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.
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.