The Microsoft Surface Experiment: Is it Time to Panic?

reported on Microsoft slashing its Surface RT orders from manufacturers by half, from 4 to 2 million. This follows on the heels of anecdotal stories that demand for the tablet was tepid over the Black Friday sales period. Now we know that the Surface Pro will be released in January 2013, a scant month from now and it is obvious that Microsoft is pinning all its hardware hopes on it.  Its main attraction, according to Microsoft?  It runs x86 programs and is therefore destined for success in the enterprise. One major problem?  The64GB version of the tablet (or laptop with a detachable keyboard, as some call it), will set you back about $1,020 -with a keyboard or $899 without.  That would be well in excess of the leading product in the space – the iPad 4 (with 64GB), which costs just $699. Also, 10.1 inch Samsung Galaxy Note tablet with 64GB of RAM would set users back just $535 on Amazon.com. So the legitimate question given the poor prospects of the Surface RT and the high price of the Surface Pro, is it time for Microsoft to panic? Or am I the only person who thinks that the ability to run x86 applications on a tablet is worth the $300+ premium (in the case of the iPad) or almost $500 premium in the case of the Samsung Note. Of course, you’d have to add in the price of Microsoft Office to the Surface Pro to take advantage of the tablet – another $100 or $150/year depending on whether you are a home or business user.  (We will talk more about Office 2013 licensing later, I promise.) YES, it is time to panic. Quietly hopefully, and in a dignified way, but time to press the panic button.  The harsh reality is that the Surface Pro is TOO expensive.  Just way too expensive.  Forget the consumer, as x86 compatibility couldn’t matter less. Perhaps Microsoft will sell a few in the enterprise, but many IT managers will simply go for ultrabooks or notebooks (running Windows 7 if necessary) and be done with it. Herbert Crocker call Microsoft’s marketing “clueless”, stating:

For those who say the price point makes sense because of USB ports and the ability to run x86 Legacy Apps, you are part of the problem. The mobile computing world is moving (has moved) far beyond that kind of thinking. We’re not talking horse and buggy vs automobiles just yet, but we’re damned close.”
Horse and buggy? That’s harsh. MacObserver adds;
The source of this problem is the idea that Windows 8 has to do double duty as a desktop and mobile OS in order to preserve both the Windows legacy and MS Office. Here’s what I said about that. And now we’re seeing the very first fallout from Microsoft’s decisions. What do you do after you ship a tablet that no one wants? Ship an even more expensive version with a power hungry i5 CPU that cries out to be slaved to a desk and power adapter.
Yes, 2013 is shaping up to be a very long year, hardware-wise, if this persists. What do you think?]]>

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