Microsoft Surfaces Compelling New Devices

Today, Microsoft launched its revamped device line. Since taking over the reins at Microsoft, Satya Nadella has focused on developing a class of devices that shows off the strength of its brand and underlying Windows 10 OS. Under the device division leadership of Panos Panay, Microsoft is well on the way to achieving that vision and moving the bar from being just a provider to a premium brand.

Today it launched the next generation Fitness Band, two new Lumia mobile smartphones, showed next generation HoloLens capabilities, announced a revamped Surface Pro, and previewed a brand new Surface Book 2-in-1 laptop replacement.

Microsoft has hit a home run with their devices this time around. Attacking the high end of the market with “halo devices”, it is establishing a position for “best in class” products and related services. Microsoft Band is not another “me too” fitness band and has the price to prove it ($249). The Microsoft Lumia phones with groundbreaking features/performance will appeal to business users (especially with Continuum smart docking capabilities through the Display Dock). The update to Surface Pro shows a continuation of Microsoft trying to push the limits in form, functionality and innovation, and the improvements in processing power, battery life, screen resolution and keyboard/pen will be compelling to the higher end, primarily tablet-oriented users. The newly introduced Surface Book may actually be the most compelling of the products launched. It re-imagines what a laptop can be, with an innovative accessory GPU that enables engineering tasks and gaming previously unimaginable in a thin/light form factor with impressive 12-hour battery life.

These announcements will shake up the market. Although everyone likes to point to Apple as being the best tech innovator, I think, after today’s announcements, the new crown needs to go to Microsoft in the markets it has identified as being critical (no doubt I will get many arguments against this position). In my opinion, Microsoft is taking the battle directly to Apple’s doorstep and has thrown down the gauntlet to say you’re not the only innovator out there. Frankly, Microsoft has left Google in the dust (although no doubt Google has the means and the will to catch up, with its new phone and tablet devices a good first step).

Microsoft’s market strategy is right on. Instead of being a volume player in a cut-throat market (e.g., tablets, phones, laptops) with minimal margins, it has chosen to reinvent those markets in its own image. Although Intel “invented” the 2-in-1 class of notebooks (along with Ultrabooks), the market has been slow to take off, mainly due to a lack of true innovation and too high a price for what users’ received. Microsoft introduced the revolutionary Surface Pro to demonstrate what could be done with some forward thinking and engineering of out-of-the-box products and the 2-in-1 market has doubled in the past year alone. With Windows 10 now hitting its stride to actually showcase what these devices can do (Windows 8 was a poor performer and a hard to use product that few liked), the market should become even more robust.

Microsoft is not trying to compete directly with its customers in general purpose hardware but it is serving notice to traditional OEMs (e.g., Dell, HP, Lenovo) that, if they won’t innovate and drive the market in the direction Microsoft wants it to go, Microsoft will. These new products are literally a kick in the butt to OEMs to start innovating. Microsoft certainly has no interest in putting them out of business and competing at the low to mid tier, but Microsoft has correctly seen a lack of understanding that there is a compelling need for higher end devices (the equivalent of Lexus or Mercedes in cars) that isn’t being adequately served, especially in the high end of the business market. It is this area where Microsoft is squarely targeting its devices and where it will be successful.

Make no mistake, MSFT could not have pulled off 30% more power, 12-hour battery life and twice the performance of a MacBook Pro in its new Surface Book without the 6th generation Intel core chips and the Nvidia GeForce GPU built into the Surface Books. Microsoft is saying this is what 2-in-1s should have been all along, and here is the products to prove it can be done. The price of the Surface Pro (starting at $899) and Surface Book (starting at $1499) puts them in the premium range, but the Surface Book does for the moribund laptop market what Tesla did for cars. With high end 8 and 6 core Qualcomm Snapdragon chips in its Lumia phones, Microsoft is saying processing power is important and price should not be a reason to make underpowered, low-performance devices.

I expect the new devices to be very popular with the high-end buyers who look for form, fit and function above price. While this is a relatively small portion of the overall market, it is the same “luxury goods” market other product segments have gone after for years and that has not been well served by the computer industry fixated on volume at all cost. Apple has known this for some time with a selected, targeted attack on the higher end consumer with its products (then ultimately letting the higher end products trickle down to the mid-priced range). Microsoft has now awakened a higher end market that is not locked into Apple’s ecosystem, with users willing to either switch, or who already have a preference for Windows but were waiting for compelling products to urge them into action.

Microsoft knows that, instead of imitating Apple as it tried to do in the past, its focus must be on differentiating. Attack them if you will, but there are still many Windows users out there who have no intention of switching. Microsoft is determined to keep them.

Published by

Jack Gold

Jack E. Gold is Founder and President at J.Gold Associates, LLC, a technology industry analyst firm. Mr. Gold has over 40 years in the computer and electronics industries, including work in imaging, multimedia, technical computing, consumer electronics, software development and manufacturing systems. He is a leading authority on mobile, wireless and pervasive computing, advising clients on business analysis, strategic marketing and planning, architecture, product evaluation/selection and enterprise application strategies. Mr. Gold is widely quoted in the press, and has presented at numerous conferences and industry events. Before founding J. Gold Associates, he spent 12 years with META Group as a Vice President in Technology Research Services. He also held positions in technical and marketing management at Digital Equipment Corp. and Xerox. Mr. Gold has a BS in Electrical Engineering from Rochester Institute of Technology and an MBA from Clark University. His thoughts and opinions are his own.

21 thoughts on “Microsoft Surfaces Compelling New Devices”

  1. I’d actually call the new Surface devices “3-in-1”: they get a real, competent desktop dock (support for 2 -maybe 4 via DP chaining ?- screens) on top of their tablet and laptop personnalities, and the Book gets an actual nVidia GPU in the keyboard slice.
    The tablet side is only a potentiality right now though: I bought a dual-boot Android/Windows tablet to test out WinRT… there are just no apps. Maybe some verticals will find what they need, or just use AMIduOS to run Android.

    1. I agree with the dearth, in terms of quantity and quality, of touch-first / tablet apps on Windows. But, and anecdotally, most of the people I know with SP3 are using them as laptops the vast majority of time anyway. Very rarely do they use it as a tablet.
      So even if buyers hardly ever use the tablet capability of the SB, it’ll still make for a great laptop. I give credit to MS here.

      1. That’s interesting – I pretty much only use my SP3 with a docking station or as a tablet. As a laptop is where the biggest trade offs are – lapability is bad because of the lack of a hinge and the trackpad is unusable for long stretches. My hats off to those whose fingers can endure using the trackpad exclusively. Hopefully MS has greatly improved this problem with the new TypeCover.

        To me the Surface Book is pretty much perfect. The gap doesn’t bother me. The only thing it is missing is the kickstand the Surface Pros have. I use that quite a bit with my SP3.

        1. I guess it boils down to priorities. If you prioritize having an excellent laptop experience with occasional tablet use, then go SB.

          If you prioritize having a “great” tablet experience with occasional KB / mouse use, go SP.

    2. I’m not all convinced it is actually even a 2-in-1. I’ve not seen anyone use it in anything but laptop mode, except on TV. All the ones I’ve seen in the wild are “laptops”.

      But from what I’ve heard from the full-time users I know, the touch mode is not well supported by anyone except MS, and even that is not as much as they would like.

      Seems like a good opportunity for Android if they can get the Windows legacy developers to port.

      With all that I’ve seen, then, the Surface Book makes a lot of sense. One of the negative things I’ve heard is that in laptop configuration the Surface Pro has a larger footprint than an actual laptop, with the kickstand. Surface Book solves that.


      1. “All the ones I’ve seen in the wild are “laptops”.

        “But from what I’ve heard from the full-time users I know, the touch mode is not well supported by anyone except MS..”

        That’s been my own personal experience well (anecdotal of course).

      2. MS have been hammering at pens for ages, I remember 10 yrs ago a colleague of mine bandying around a Fujitsu convertible with pen input. They must know something that we don’t… probably a case of a) MS-oriented buyers not being in pen-using roles, and b) hardware being ahead of both apps and the market.

        I’m thinking Pen apps will at some point inflect into the mainstream or at least into relevant verticals. There’s pens everywhere these days, it should happen soon…

        Plus everyone I demo my Pen-enabled Galaxy to is impressed. I don’t tell them I barely ever use it ^^

        1. They must know something they are not telling anyone, too, since it has been so difficult to get developers on board. So far Windows developers just don’t see the need for a touch interface. Surface doesn’t present them with that need, either. It gives them an out.

          I think pens will hit into the mainstream when it doesn’t take a special pen to do basic stuff, like real pens. That is one thing I kind of liked about my old HTC Windows 6.5 phone. Even when I lost my pen, I could still use other things. But of course, the pen was not really a “pen” interface, either. It was just a mouse in stick form on a resistive surface. My fingernail did the same thing, if I were careful.


          1. From my personal experience (anecdote incoming), writing is not faster than typing even on touchscreen, moreso on a real keyboard. It is a bit more relaxing since I’m not a touch-typist, but I am an e-native, so I always need to edit stuff a lot, and for editing a keyboard is much faster.

            I’m thinking pens make sense when you need a very direct brain-to-screen connection. Maybe due to circumstance (doc making rounds), maybe due to user (keyboard-averse). But that implies the app really must facilitate that, I’m guessing that takes a rethink of the whole UI (make it disappear when the pen is drawing, then reappear in a not-focused corner ?).

          2. There’s the reason you mention, but for drawing an idea, or writing a mathematical equation, there is no substitute for a pen.

  2. I don’t understand the author’s unbridled enthusiasm behind these products. Seriously.

    The Surface is still a compromised product, because it’s not stellar at either task. The phones are DOA, except as an alternative to die-hards who resist iPhones and further down the food chain, Androids. The higher-end Surface Book is still too pricey as viable alternatives to other Windows ultrabooks and MacBook Airs.

    Love Windows? Uh, no. That’s an aspirational pipe-dream, and I don’t see anything here to change my mind. Finally, there’s no evidence Windows 10 is “hitting its stride” in enterprise. The designs are marginal improvements, but expectations are so low from Microsoft products, it’s understandable the author think these products are home runs: They’re not.

    1. The other thing is that Windows as a platform is essentially dead. Developers have gone off to iOS and Android and they ain’t coming back. Convertibles over the years have flopped and I don’t find them attractive at all. Give me a new MacBook any day.

  3. Without tough competition Microsoft had grown obese and bloated. Thanks to competition now they are made to work out. It is always good for the end user.

  4. I’m fascinated by the fascination of the Surface Book.

    It’s an solid design — aside from the incredibly noticeable gap when it’s closed — but if I’m not mistaken HP, Dell and Lenovo have made laptops with detachable screens yet I don’t recall the same enthusiasm as Microsoft’s Surface Book is receiving.

    Interesting how Apple can make an iPad Pro with a keyboard-case and it’s considered a direct copy and justification for the Surface but Microsoft completely apes another OEM’s design and no one notices.

    1. There’s a timing issue: the hardware needed Win10 to really make a compelling case. Too bad the tablet apps are still missing… they’re now *possible* though.

      There’s a design and branding issue. No OEM has solved the schizophrenic equation of being both volume and luxury. I recently had a discussion I think on this site about Asus being crap…. which they aren’t, some of their stuff is low-end, but some of their high-end stuff is excellent. Customers don’t seem to have the brainspace for that duality. MS hardware has no such baggage, and a 0th-tier aura. Plus the hardware is very nice and seems to get the details right (backlight, battery, lapability, even the webcam position that Dell managed to screw up ^^).

      Also, there’s a features issue: what other convertible has a GPU and a desktop dock ?

  5. As much as I too am very happy to see Microsoft providing much needed improvements, what they have done has not addressed the fundamental issues that the PC market and the tablet market are facing. Remember, neither PCs or tablets are growing. It is very unlikely that a sexy new way to merge these markets, will provide good reasons for people to buy.

    Of course, looking at the growth that Macs are enjoying, we might be tempted to conclude that if only sexy Windows products had existed, the whole PC market would be growing. That may be true, but conflicts with all contemporary explanations for the sagging PC market. The most accepted reason, as I understand it, is that the lack of compelling new features is slowing down the replacement cycle, and since most simple tasks can be done on smartphones anyway, money is being spent on phones. The exact same goes for tablets as well.

    OEMs have not stopped innovating for no reason. The stopped because few bought the high-end products. And the reason people stopped buying pricey products is because of the software has not provided compelling new features. Kicking them in the hardware butt alone is not the solution.

    Hence in my opinion, the most interesting things to watch are on the software side, the integration of new hardware with the software, and the business/IT department side. These the things that will create demand for good hardware and not the other way around. While the general vitality that Microsoft seems to have regained is certainly promising, software is still lagging. The next year will be interesting as Microsoft will presumably improve their half-baked universal apps to be on feature parity with their desktop ones, try to convince developers to do the same, and hopefully come up with new productivity apps which are better suited for mobile productivity, and which might snag a few ideas from some startups.

    1. The MS/Windows dilemma is, ironically, developers, not, as you point out, hardware. They can’t seem to attract interest from touch device developers and they can’t seem to move the developers they do have, mostly legacy enterprise and other corporate developers, beyond keyboard/mouse.

      I think MS misrepresented Tim Cook’s fridge/toaster image. They seem to think he was talking hardware. He was talking, and MS clearly illustrates his point, OS.

      I’m not a big, or even mildly interested, gamer. Any ideas if Windows game developers are doing anything interesting with the touch/keyboard combo?


      1. “The MS/Windows dilemma is, ironically, developers, not, as you point out, hardware.”

        More to that point, after watching the keynote I noticed that Microsoft never brought out any developers. It was all Microsoft, all the time.

        Makes me think about referrals; your interest level will rise if you hear from someone other than the vendor. When Apple launches/debuts new hardware/software features there’s usually a developer there to tell a story about why this Apple widget is so great.

        Listening to Panay wax on in the most hyperbolic manner I think I’ve every witnessed I couldn’t stop thinking how his constant “this is great” speech would be better supported by hearing from a 3rd party developer or frankly anyone else (I’m not particularly fond of his time share condo salesman-style rhetoric).

        Rewind a few weeks ago and you’ll find Microsoft on stage telling attendees how great Office works with the iPad Pro and the Apple Pencil. Not so at the MS event. Mostly just Panay and that portly, jaunty fellow in a purple fedora and sweater vest waxing nonsensical about using a slimmed down version of Windows 10 on a phone with a chubby port hub and a series of cables.

        Okay, so Microsoft showed off a new laptop and made some improvements to the Surface Pro and MS Band. Where’s the rival solution to Apple/Samsung/Android Pay? No CarPlay/Android Auto? Why put a fingerprint reader on the Surface Pro keyboard-cover but not on any other product (especially when they continue to hype Windows Hello)? What’s Microsoft’s plans for the smart home? Do they have a rival product for Apple TV or Apple Music (or Spotify for that matter)? Does Microsoft have the gravitas to dabble in the fashion world like the Apple Watch partnership with Hermes (that’s rhetorical)?

        Based on much pundits like to doubt Apple’s ability to keep up their pace of innovation it’ll be interesting what Microsoft does from here.

Leave a Reply

Your email address will not be published. Required fields are marked *