A Little Less Surface, a Little More Sales?
The tablet market seems to be cooling, and Microsoft hasn't even had a chance to play much in it yet. It's probably now or never for the company to bust a move, and it's rumored to be doing just that. It's expected to debut a smaller Surface tablet in a couple of weeks, which could put it in contention with Apple's mini, Google's Nexus 7, Amazon's Kindle Fire and others.
Microsoft is expected to debut a smaller version of its Surface line of tablets later this month. The company reportedly will showcase the device for the first time, along with other new Surface models, at a New York City event on May 20.
The smaller version of the Surface will run on Qualcomm processors rather than the Nvidia and Intel chips Microsoft previously has used for the Surface line, according to Bloomberg. Some of the other new models apparently will continue to use Intel processors, however.
The move may be an attempt by Microsoft to muscle in on a market dominated by Apple's iPad mini and a number of Android-based tablets, such as the Nexus 7.
Microsoft was not among the top five tablet vendors in the first quarter of this year, according to a report IDC released last week.
Apple Market Share
Apple shipped 16.4 million tablets worldwide in the quarter, giving it a market share of 32.5 percent. Samsung, Asus, Lenovo and Amazon rounded out the top five, with Amazon's 1 million shipped tablets giving it a market share of 1.9 percent. Those numbers indicate Microsoft shipped fewer than a million tablets in the quarter.
Growth of the tablet market was expected to slow to 19.4 percent in 2014, IDC predicted in March. That figure is down from 51.6 percent in 2013. Microsoft may have it's work cut out for it to make significant inroads into a cooling market.
"Having a smaller version may broaden its appeal to other consumers and make it look and feel more like some of the smaller tablets in the market," said Jim McGregor, principal at Tirias Research.
"However, the size alone is not enough to energize the Surface product line. Surface hasn't generated much interest amongst consumers in part due to some of the reviews and first-hand usage of the devices," he told TechNewsWorld. "Although the Surface family is getting better, it has lagged in performance, responsiveness and applications."
Mobile, Cloud Focus
CEO Satya Nadella, who took over the job in February, reportedly is planning to turn Microsoft into a company focused on mobile and the cloud. Snippets of evidence -- including the launch of Microsoft Office apps for iPad and updated versions of Windows Phone software -- indicate as much.
The company's rumored decision to use Qualcomm chips in the smaller Surface may raise interest, since Snapdragon processors are widely used in top-selling smartphones, such as the Galaxy line from Samsung.
However, other processors typically are used in tablets, such as Apple's own processors in iPads and low-cost chips manufactured in China in lower-end tablets.
"Qualcomm has done very well in smartphones but is struggling in the tablet market, so making what amounts to a fresh start could be good for both companies," said Charles King, principal at Pund-IT.
"However, I don't expect the partnership to significantly benefit either one in the short run," he told TechNewsWorld, "since driving large volumes of new mini tablets seems unlikely. However, that same point has ramifications for Microsoft's former partner, Nvidia. Losing a high-profile partner is a strategic blow, but the weakness of Surface RT sales means the company won't suffer much materially by Microsoft jumping ship."
Microsoft last month reported that device and consumer hardware sales -- including those of Surface tablets and Xbox consoles -- reached US$1.97 billion, beating analyst predictions of $1.95 billion.
This is not the first time Microsoft has expanded the Surface line beyond the RT and Pro models. In March, it released a version of the Surface 2 with LTE connectivity on the AT&T network.
"After some initial struggles, the Surface Pro line appears to be picking up momentum and is likely to accelerate due to complementary new technologies, including Intel's latest generation of energy efficient CPUs," Pund-IT's King pointed out.
"The Surface RT is more problematic due to its core technical limitations and missteps by Microsoft's marketing organization. Given those points, along with the strength of key vendors of Android-based products and the flood of low-cost tablets coming from Chinese manufacturers, I expect the Surface RT will continue to struggle," he said.
"Surface has been a misfire from the start," Roger Kay, principal at Endpoint Technologies Associates.
"A smaller version could help, but Microsoft is creating no incentive to choose its platform. The promise of a unified experience across form factors is nice, but in reality it doesn't yet work, and the current state of Windows for consumers is a mess," he told TechNewsWorld.
"I get Microsoft doing prototypes and reference designs and leading the market," Kay said, "but it doesn't understand how to do channels or marketing and is attempting to compete with its best customers."