Before anybody accuses me of being a Microsoft (NASDAQ:MSFT) hater because I'm an Apple (NASDAQ:AAPL) fanboy or something, let me point out that I'm typing this on my Windows 8 Ultrabook, and that my primary workstation is Windows 7 based. I further plan to buy an 8" Windows 8.1 tablet as soon as they hit the shelves, and generally speaking, I love Microsoft's OSes to death.
But Microsoft has been doing some really...questionable things lately, and the recent launch of the Surface 2 and the Surface Pro 2 really do highlight just what is wrong with some of the decision making over in Redmond. As a Windows-enthusiast and as a software geek with an immense respect for Microsoft's quality software development tools, I'm just shocked that the company can get something that seems so easy so terribly wrong.
The Surface (RT) 2: Why Do You Exist, Again?
After taking a nearly $1B write-off on its Surface RT, which sold miserably in no small part due to the fact that it was a Windows RT (and not full Windows 8) device (that means no legacy/desktop application compatibility), Microsoft goes at it again, but this time it calls the device simply "Surface 2" (likely because Windows RT has left a pretty bad taste with consumers)
This device is much better than last year's model - it comes with a Tegra 4 processor from NVIDIA (NASDAQ:NVDA) which brings substantial performance and power improvements, and a 1920x1080 display (up from the 1366x768 one in the original Surface). It's also a bit thinner and a bit lighter, and is generally a much better device. Of course, it sells for a heftier $449 (while the unsold Surface RTs continue to go for $349), and if you want a keyboard along with it, that'll be another $130, please.
The problem with the Surface 2 is that it's a 10" tablet that is really designed to be a convertible (i.e. you attach a keyboard and all of a sudden it's a laptop). Windows RT, which isn't compatible with any of the legacy Windows desktop applications, is a poor choice for this type of device. If this were a 7-8" device, then Windows RT's incompatibility with traditional desktop apps isn't much of an issue in and of itself (although if the vision of mobile compute comes to pass, such a device should be dockable into a full Windows 8 PC, but I digress), but at the 10" form factor - particularly one that's sold as a convertible - Windows RT is just unacceptable.
It also doesn't help that Microsoft's own partners such as ASUS have already announced devices such as the Transformer T100 which, for $349, not only gets the customer a tablet with a full X86 Intel (NASDAQ:INTC) Ato Z3740 (that means all of the traditional desktop applications will work), but it gets the user a full detachable physical keyboard. The major sacrifice is a 1366x768 screen against the Surface 2's 1920x1080 one, but also note that with a type cover, the Surface 2 costs a whopping $579 - yikes! The value proposition just isn't there for the Surface 2.
Surface Pro 2 Isn't Much Better
The Surface Pro 2 is touted to have much better battery life than the original Surface, which was hampered by a platform that was never designed to be stuffed into a tablet to begin with. So, guess what Microsoft does this time? It moves to the much touted Haswell for Ultrabooks with a wonderfully low 15W thermal design power.
Wait, what? Yeah. So, instead of improving the battery life and making the device significantly thinner, Microsoft keeps the same, fairly large chassis and equally large price-tag. Microsoft could have availed itself of Intel's 6W SDP Haswell parts specifically designed to go into thin tablets (and after getting to use a thin and gorgeous tablet with one of these chips at IDF, I'm just floored that Microsoft is even trying to push this). But no, Microsoft once again shows that it's either on a quest to convince the populace that if you want something "thin and light", you need to buy RT. Fortunately, the rest of the ecosystem won't let this happen.
Aside from being expensive, featuring the entirely wrong device, and being too bulky, the Surface Pro 2 is actually a decent laptop replacement with everything from USB 3.0 to Ethernet to a really neat pen included. But the problem is that Microsoft's competing with its OEMs here, and frankly, I think Sony's (NYSE:SNE) Vaio Tap 11 and the numerous other "Haswell" based tablet/convertible designs will have the Surface Pro 2 outgunned and outmatched.
Conclusion - Stop Aping Apple, Microsoft!
As somebody who recently purchased his first Apple product ever the other day, I can understand why Microsoft wants in on the "devices" craze. But the truth is that Microsoft has a pretty damn good business licensing Windows, and if it can get its "Modern UI" off the ground, it can keep milking its customer base for all they're worth. However, this sort of "brilliance" requires focusing on doing one thing right. Apple didn't get to be Apple by copying anybody else - Apple became Apple by doing what its corporate DNA was best at: shiny devices for the masses.
Microsoft isn't Apple, and that's A-OK! Its business is much more diversified and less dependent on consumer buying patterns, but at the same time it can get a very lucrative piece of the action if it just stops competing with its partners and takes its rightful place as the guiding light for the Microsoft Windows platform. Instead, it wants to play the hardware game in the eventual race to bottom-of-the-barrel margins. Well, what can I say? I'm not surprised at this point, particularly as Microsoft generates enough cash that it can afford to do these whacky stunts.
But Apple didn't get to be where it was today by sitting on a mountain of cash and throwing proverbial darts until something stuck. It was the result of a man betting the company on a singular vision with no margin for failure. Microsoft has plenty of margin for error, and I suspect that's part of why it will continue to make these obvious mistakes.
Disclosure: I am long INTC, NVDA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.