September 23, 2013
Microsoft’s Surface generation 2 announcements today show that they are firmly committed to the hardware business for tablets and PCs, not just Nokia Windows Phones. See my colleague JP Gownder’s blog post for his take on how Microsoft will need to update branding and go-to-market to succeed.
As with the original Xbox bet more than a decade ago, Microsoft will persevere in creating premium, fully controlled hardware and service experiences. This will create more and more contrast with low-end Windows devices from many OEMs. I predict that Microsoft will eventually anoint a handful of OEMs, two to four, as premium providers — which means that Microsoft will have to create a premium Windows label or branding to distinguish these premium hardware offerings from the budget offerings that many buyers will still focus on.
The details of the new Surface devices — better performance, battery life, kickstand, displays, and more — and the range of new accessories — such as dock, battery and backlit keyboard covers, and more — are proof of an expanding hardware ecosystem. The Surface Remix, a musical controller that magnetically clicks in like the TouchCover, is a very creative and novel addition to the possibilities of mobile devices.
But Microsoft’s real strength is the breadth and capacity of the online ecosystem for consumers and enterprises that they’ve built with the Microsoft account, SkyDrive, Office 365, and Azure. This online platform is the foundation for serving the growing “digital self” that online individuals are building. So we’ll measure the success of Microsoft’s hardware in the context of the uptake of Windows 8.1, the update to Windows 8, and especially the downloads and sales of apps in the Windows Store. And there the jury is out until the fall of 2014, as the market absorbs the significant improvements in Windows 8.1.
So the real question is whether the Surface line, especially the ARM-powered Surface 2 (as opposed to the Intel-powered Surface Pro 2), will give Microsoft a spot in the truly mobile tablet realm. There we expect a long, slow road against the huge tablet ecosystems that Google’s Android and Apple iOS have built up — especially Apple. Microsoft is still working to get most of the mainstream mobile apps on Windows modern and Windows Phone — and to get individuals to start using them. Microsoft’s Surface products, Windows 8.1 modern, and Windows Phone are very credible platforms for Microsoft and its OEMs — but the best that will do is keep them in the game, scrapping to get developers to recognize and build for this third mobile platform. Here’s wishing Microsoft luck in an uphill fight for relevance in the mobile-first world we now live in — so that we get interesting, vital competition.