Quick Thoughts: The Surface strikes back!

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  • The Surface 2 boosts performance, battery life and display vs. the disappointing Surface RT. $449 is pricey, but free Office, SkyDrive storage and Skype calls sweeten the deal.
  • Surface Pro 2 moves to “Haswell” and gets faster processing and 75% better battery life, along with full Windows 8.1 and the same box of digital goodies offered with its little brother.
  • MSFT also offered up new keyboard covers, including one packing an extra-battery to give the Pro 2 another 60% boost, and a docking station to turn the Pro into a desktop workstation.
  • The new products aim to fix the biggest complaints about the first Surface models, and largely succeed. MSFT has a long road to relevance in tablets, but these tablets are a good first step.

You have to give Microsoft credit for persistence. Most companies, after taking a $900M write off on a poorly received product, give some serious thoughts about throwing in the towel. Serial blunderer HP shuttered its supposed “iPad Killer” tablet operations in 2011 along with its record $3.3B write-off. Blackberry, took the opposite tack after its $485M write-off on unsold Playbook tablets inventory and stayed at the table. We all know how THAT has worked out.

Microsoft is betting that it will succeed where Blackberry did not. The criticism of the initial models – wimpy processors, poor battery life, high prices – was taken to heart as the company planned a Surface do-over. The basic segmentation – one tablet for the road warrior that needs a real computer, and another, cheaper, model for the casual media consumer – would remain the same, but beefier silicon and a slicker display would be matched with the revamped Windows 8.1 and a bundle of cloud goodies to deliver a compelling value proposition. The results were revealed today.

The road warrior model, the Surface Pro 2, runs a full version of Windows 8.1 and is cosmetically identical to the original Surface Pro, but its hardware and performance gets a significant upgrade that makes it the true laptop replacement tablet. Microsoft executives claim the tablet is faster than 95% of current laptops on the market.  With a 22nm Intel Haswell Core-i5 processor featuring 3D lithography, the new tablet has 20% faster processing performance in addition to a 50% graphics performance improvement and 75% better battery life than its predecessor. The battery life, the biggest gripe from would-be enterprise buyers, can be further extended with the optional Power Keyboard Cover, which combines a keyboard with an extra battery that extends the time between charges to more than 2 and a half times the original Surface Pro.

Microsoft also showed off a docking station, with three USB 2.0 ports, one USB 3.0, a mini DisplayPort, Ethernet, Audio In, Audio Out and Power, that turns the Surface Pro 2 into a viable desktop computer. This tablet can also be accessorized with new backlit keyboard covers that put the Surface Pro 2 head to head with similarly capable ultrabooks. Without much pricing detail, Microsoft only revealed the Surface Pro 2 will start at $899 with 4GB RAM and 64GB storage configuration available with RAM up to 8GB and flash storage up to 512GB. These are expensive relative to most other tablets and also relative to some laptops, but the combination of performance and portability should be attractive to enterprise buyers and work-focused consumers.

The Surface 2 replaces the ignominious Surface RT – the subject of that $900M write-down and subsequent fire sale. The new model is much faster with a Nvidia Tegra4 under the hood and the same 1080P screen as its big brother, the Pro. Battery life is claimed to be 25% better than the previous version, the front camera is improved to facilitate video chatting and the widely maligned audio is enhanced by new speakers and Dolby sound. The general good looks are largely unchanged, although the product is advertised as thinner and lighter and the kickstand has a new second position for lap use. Microsoft hopes that the improved stability and functionality of the 8.1 revision of Windows RT, free native Office compatibility and a year’s worth of app additions are enough to dampen complaints about software availability. The price was cut 10% vs. the original to $449, still on the expensive side for tablets, but a $120 discount to the cheapest full sized iPads.

Microsoft has one more trick up its sleeve to juice interest in its new tablets. Both come bundled with some serious digital swag. Microsoft Office comes gratis – the slimmed down RT version for the Surface 2 and the full $200 Professional version for the Pro. Buyers of either tablet will get 200GB of SkyDrive cloud storage for two years – ordinarily a $100 add-on. But wait, there’s more – both Surface models also come with free Skype calling, including international, worth another $100. These add-ons make the $449 Surface 2 and the $899 Surface Pro 2 much better deals than they first appear.

Of course, Apple is expected to introduce its own new tablets next month, an event that could render Microsoft’s offerings considerably less attractive. However, the buyers for whom Office and Windows compatibility is important may find that even the Surface 2 better meets their needs. Both Surfaces offer appropriate specs for general enterprise applications and bundle some important tools, an area where neither Apple nor Google’s Android ecosystem partners have made significant inroads. Microsoft has a history of tenacity entering markets – remember the early Xbox? The new Surface models are a resolute step down the road to the future of computing.

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