On Tuesday, Microsoft did something interesting: it moved even further into the hardware game by introducing a new laptop, the Surface Book.
Except, the Surface Book isn’t really a laptop at all, it’s a hybrid that starts as a laptop but can transform into a tablet (or, as Microsoft is calling it, a “clipboard”) just by pulling the two halves apart.
According to Panos Panay, the head of Windows Devices at Microsoft, the Surface Book has been in development for several years and aims to fill a need with customers for a powerful device that has a sturdy keyboard but can be used as a tablet. While this sounds fine in practice, there could be one big problem: do customers actually want this?
Bucking the trend
The PC industry as a whole is in decline. According to data from both Gartner and IDC, sales have dropped somewhere between 9.5% and 12% in a year. The only vendor — which includes HP, Dell, Lenovo, Acer and co. — that isn’t seeing a negative trend is Apple, the sales of which grew 16% in Q2 2015.
The reason’s Apple can buck this trend are multifaceted but are in large part down to the brand recognition that comes with the company, driven by the iPhone. The company has been rated the “most valuable brand” in the world three years in a row and customers clearly see the MacBook as a desirable purchase whereas the Lenovo ThinkPad T450 or HP Pavilion x360 13 are not.
By entering the market at this stage and without Apple’s brand recognition, Microsoft is potentially making a big miscalculation. Consumers, by and large, are moving away from bigger devices — such as desktops and laptops — toward smartphones and tablets, just as Microsoft moves in.
Microsoft isn’t entirely new to the market, however. The Surface line generated around $US888 million (£580 million) in revenue during Q4 2015 (which Microsoft records in July), up from $US713 million (£466 million) in Q3 2015.
While these numbers are impressive, they pale into comparison when compared to Apple which brought in $US6 billion (£3.9 billion) from the Mac during the same period.
The comparison is apples-to-oranges — Apple sells a much wider range of products, for one thing — but the overall trend is not in Microsoft’s favour. Unless Redmond is happy to sit back and only take a small percentage of the market then changes are going to have to happen.
Building brand recognition
There is, of course, no magic wand that Satya Nadella can wave over the company to immediately create the recognition that Apple receives, especially among normal folks who don’t regularly check technology blogs. But there are things that will help.
Rolling out the Surface devices in conjunction with Windows 10 is a clever strategy, especially as the software is already being used by more than 110 million people in a little over two months. (OS X, for comparison, is used by around 80 million people in total.) The sales pitch of the Surface has always been “Here is the benchmark for Windows machines” and this close association will likely do the new Book, and Surface Pro 4 good.
Advertising the product to the right people — students and professionals who are on-the-go, for example — is also important and is, to its credit, something Microsoft has been tirelessly working on.
However, one of the main problems remains that the Surface lacks name recognition. Google Search trends data shows that even the iPad Pro — a device that becomes available in November — is outstripping searches for “Microsoft Surface” while searches for “MacBook” leave it in the dust.
The press will be a big part of helping the Surface Book achieve popularity, and it seems that journalists are warming to Microsoft. The Verge declared that “Microsoft has warmed my cold cynical heart with hot new hardware” while The Guardian simply stated that “Microsoft is taking the game to Apple.” Tech Insider said that the Surface Book is “insane.”
Beyond all of this, Microsoft must go on an advertising offensive, spending some of the billions it receives from other areas. The very introduction of the Surface Book shows that the company is serious about creating hardware but getting that hardware into the hands of consumers is the biggest hurdle.
Surface Book 2?
In an interview with Mashable, Panos Panay made an interesting comment: “One of the things we did not want to do is…launch a Gen 1 product that was OK and then give you a Gen 2 product, where you’re like, ‘Oh, now I get it.’ … you can think of [the Surface Book] as Gen 1 was in our labs and Gen 2 became this product.”
This sentiment follows an analysis of the launch of the original Surface which, whether rightly or wrongly, was compared to the iPad. “The press, they grabbed it and were like, ‘This is the iPad; look at this, it’s thicker, it’s heavier.’ But, you know, [the Surface] was like a hundred times faster.”
This failure of controlling the message is something Microsoft has messed up time and time again but, thankfully, is improving on. The Book was kept almost entirely secret and Microsoft immediately set the tone by comparing it — on stage — to a MacBook Pro, rather than an iPad.
When the reviews come out it will be clear whether the Book is a success or a failure but the initial hands-on experiences have been largely positive. For the product to succeed, however, it will need to be a success now: there is no opportunity for a second try and it’s good to see that Panay realises this.
Can Microsoft do it?
The odds are in Microsoft’s favour — even if only by a little amount. For the first time in a decade people are excited by a Microsoft product — as Tech Insider’s Steve Kovach was — and Satya Nadella seems to be having an overall positive impact on the company, untying internal feuds and rolling out products that are class-leading, such as Office for iPad.
The first half of the battle — making good hardware — is over, and Microsoft seems to have come out on top. The second half — actually getting people to buy it — is by far the hardest part and will involve months of hard work pushing the Surface line at customers and convincing them that Microsoft’s offerings really are what they want — even if the alternative is a MacBook.
Only time will tell on this one, but the leadership of Satya Nadella combined with the excitement that the Book has created mixed in with Microsoft’s deep pockets would seem to point in the direction of success rather than failure.