Surface 2: How Microsoft can make it work

Surface 2: How Microsoft can make it work

Summary: The folks in Redmond are refreshing the Surface RT in spite of a nearly $1 billion hole. The upcoming Surface 2 might surprise those who expect it to also fail, and here's how.

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Surface RT
Image: Microsoft

It seems I'm regularly giving Microsoft unsolicited advice, and the word that the Surface RT tablet will be refreshed has triggered the advice once again. The Surface RT was a dismal failure no matter how you look at it, with Microsoft taking a $900 million write-down due to unsold units. For many, that would be enough to throw in the towel for the Windows RT line but apparently not for Microsoft. Having given it some thought, Microsoft could make a go of it with the Surface 2 if it's careful.

The Surface RT had the deck stacked against it from the beginning. It only runs Windows RT, a stripped-down version of Windows 8 that can't run legacy apps like full Windows. It was also over-priced, an error Microsoft has since addressed with price drops. On top of those big disadvantages, the confusion about the differences between Windows 8 and RT supposedly led to a high return rate for Surface RT as buyers got them home and discovered the limitations of Windows RT.

Microsoft has obviously decided to give both Windows RT and the Surface RT another chance according to ZDNet's Mary Jo Foley. The Surface 2 should launch this month with refreshed (and better) hardware. The company needs to tread water carefully with the Surface 2 to avoid another failure like that of the Surface RT.

Careful branding

It is significant to see Microsoft make a slight change in the product name, going with Surface 2 and dropping reference to RT. Many who follow such things believe RT is too restrictive and that it makes more sense to go full Windows with the Surface Pro.

It will be hard for Microsoft but don't push the Surface 2 as being Windows.The average tablet buyer isn't looking for Windows and it may actually be a negative.

Mainstream consumers, the group Microsft should want to target with the Surface 2, don't care about RT vs. Windows 8. They just want to buy a tablet, so going with Surface 2 is a good move on Microsoft's part. 

Where the company has to be careful is in the advertising. If Windows is promoted at all with the Surface 2, that market confusion is going to rear its ugly head again. Windows RT is not full Windows, and Microsoft must make sure and not even imply that it is in Surface 2 ads.

Instead, push the Surface 2 brand as a tablet, nothing more or less. That's what the majority of tablet buyers are looking for, a simple tablet they can do stuff with. That's the message that needs to come through loud and clear.

To note an advantage for some buyers, Microsoft can push the availability of Office on the Surface 2. Don't make it seem that only those seeking Office on a tablet should buy one because frankly I don't think that many care. Just note it's there.

More importantly, and this is going to be hard for Microsoft, don't push the Surface 2 as being Windows. I believe the average tablet buyer isn't looking for Windows and it may actually be a negative. Many associate Windows with work and not in a good way. Just show it in action and let the Surface 2 sell itself.

Pricing

The current pricing for the Surface RT, $349 better be the maximum price on the Surface 2. Sure it's better than the Surface RT but those didn't sell much at least partially due to price. It's a good idea to get the Surface 2 price even lower than that to have the best chance in the market.

The pricing strategy will have to reflect the business strategy for Microsoft. If the goal is to sell a bunch of them, price it lower than the Surface RT at launch. If the objective is only to sell a smaller quantity, hopefully to reflect a new reduced level of manufacturing compare to Surface RT, then go no higher than $349.

The latter strategy would tell me that Microsoft's only keeping the Surface 2 with Windows RT around to have a cheaper option for those who want it. That's fine although it won't get much sales to speak of and not be a big product for Redmond.

Launch and ship

According to ZDNet's Mary Jo Foley the Surface 2 will be launched on September 23 but probably won't ship until later. It's logical to assume it won't ship until October 18, the date Windows 8.1 (which it will ship with) is to be available.

I'm not a fan of shipping after the launch event for any gadget as that loses the excitement and enthusiasm such events generate. I believe Microsoft would be better served to actually ship the Surface 2 at the launch. Get as many in the hands of enthusiasts as possible by selling them immediately after the launch event.

Not only will that capture the moment, it will surprisingly put the new Surface 2 in buyer's hands along with Windows 8.1. Buyers will feel they've hit the jackpot with a new tablet and the new version of Windows before most everyone else.

It's a gamble

This advice is given from the way I see things. If I had my druthers I'd kill off Windows RT entirely, as I think it only hurts Microsoft. Since the company is determined to keep it going along with the Surface 2, it had better do it right to keep from pubicly flopping again.

If Microsoft has a small tablet hidden up its sleeve as rumored, this advice applies double to it. Push the typical tablet functions along with the form factor and leave Windows out of the advertising completely. As with the Surface 2, the vast majority of small tablet buyers do not head out looking for a tablet with Windows. The Surface RT debacle has proven that.

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Topics: Mobility, Tablets, Microsoft Surface, Windows 8

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95 comments
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  • It's A Dead Duck

    A few fanboys will buy it then it's going the same way as the Kin.
    Alan Smithie
    • Wrong. They just need a new business model for mobile...

      Microsoft simply needs a new business strategy for mobile--license Windows RT & Phone to OEMs for a penny... so they can actually make a buck or two off of it (while still allowing Microsoft to maintain some control over the hardware specifications). Microsoft can make its buck from selling services & apps. This would actually make RT & WP OS cheaper than the licensing fee paid for Android devices (since it is not actually free, because OEMs have to pay Microsoft a few bucks for its patents).

      Furthermore, Microsoft should sell the Surface RT & Windows Phones at near breakeven prices (say, about $250 for a Surface RT)... again, making their money from services & app sales as the platform gains market share--and at those prices, it WILL gain market share.

      THIS is how Surface RT, Windows RT, & Windows Phone will gain market share, mind share, developers, and apps.
      cybersaurusrex
      • Surface will Fail

        A combination of factors will see Surface 2 fail.

        1. Both the Surface brand and the Microsoft brand are damaged in the portable devices market, due to past duds.

        2. Microsoft (and Ballmer) have Apple envy, and copied Apple's basic elements, such as the walled-garden concept and closed platform, supported by retail sales. This concept simply will not work.

        3. Chances alone point to failure. Zune, SideKick Phone, Kin 1, Kin 2, Windows Mobile, Windows Phone 7, Surface Pro, Surface RT. They all failed. Why will Surface 2 be any different to the rest?
        Vbitrate
        • Actually

          Windows Mobile was quite a success in the market, just not the consumer market.
          roteague
          • Such a success...

            that I never seen one being used ever!

            I have tried to support a couple of users with Win Mobile devices, and even when I got them working, they still were a poor experience. They abandoned them quick! I have never seen a win 7 phone, but I have read people bragging about how great they are in this forum. I have seen one, and only one, windows surface just last week, and the guy couldn't get it to work on his Windows network or print to his networked printers. Will the suck ever end?
            mlashinsky@...
          • anecdotal evidence

            wow! So we are supposed to believe you. I had a windows phone before iPhone showed up and it worked exactly as I expected. It was the best experience at that time. And guess what, I have seen some guy who could not get to work his iPad/iPhone/Android/Win phone/tablet. What does it mean? I have seen plenty people using Surface or windows phone. What does it mean? I have no idea. Different businesses, different countries, different income, different age of users,,,, this could mean many different things besides just the quality or popularity of the platforms.
            pupkin_z
          • Re: anecdotal evidence

            Why not? That's all the Windows Phone/RT fanbois can offer, after all: "works for me, don't know what you're complaining about, all my friends have one" etc. If the pro side can do it, why not the anti side?
            ldo17
          • You need new glasses then

            I can remember at one point everyone in business had a windows mobile miles more than blackberry even, it was a massive success, just that MSFT didn't build on that and thought they'd captured the market. Big mistake
            Claretbob
          • You are right.

            I had a couple of Windows Mobile phones, as did several of my peers. It had some bugs that were annoying, but I overall liked them. I had hoped that when the Windows phone came out, that it would have been like an improved version of Windows Mobile. As it turns out, the new Windows Phone had a locked down operating system that was more like a Microsoft version of the Iphone. This is when I switched to Android and never looked back.
            sgtm8@...
          • Aye! There's the rub!

            Microsoft knows how to sell to the enterprise. Apple knows how to sell to consumers. Neither company really understands how to attract the other's customers.

            Microsoft has taken a huge risk by trying putting the Metro interface on Windows 8 - and they have certainly stumbled by not explaining to consumers what they were offering them but, once committed, Microsoft does not give up easily.

            IMO Tim Cook is putting Apple at risk by seeking a more mainstream market but he has little choice.

            Microsoft has little to lose (and a lot to gain) if their new strategy is successful.
            M Wagner
        • Interesting...

          ...because my company is in the process of replacing iPads with Surface Pros because iPads have been a disaster to implement and are really nothing more than very expensive e-readers for business purposes. Many companies are doing the same, but much to the chagrin of the tech media companies don't upgrade their entire equipment install base at the drop of a hat so it doesn't create exciting stories, although it does create great sensationalized click-bait stories.

          Windows Phone? It's growing daily with success story after success story. Entering an entrenched consumer electronics market is no easy task. Windows Phone has reached double digit market share in a good number of countries. The lack of success in the US is largely carrier driven as the US carriers have been absolutely horrific partners for Windows Phone. This isn't the case outside of the US.

          Let me ask you this, would you consider Mac a failure? If not, why not? After 35 years it has less than 8% market share. In fact, Windows 8, which some call a failure, after just a year has greater market share than all currently supported versions of OSX combined.

          Also, shall we list all of Apple's failures over the years? I guess they should have just given up when they had to be bailed out by Microsoft. I mean, after all, success only comes from giving up.
          jumbledmess
          • You are the exception

            Apple iOS owns the enterprise market, this is not an opinion but fact supported by numinous sources.

            Macs always had a niche market, they provided a better solution but at an cost, they also lacked software in various areas. The Windows phone is in a similar situation except they do not offer a better solution. At best it would be equal but in reality it is not as good. So there is not real reason to move to a solution that cost the same and offers less, ie Zune and we know how that ended. They need to drop their price considerably.
            KBabcock75
          • I don't see iPads anywhere

            I work in fortune 500 and 100 companies all the time as a consultant. I have yet to see an iPad anywhere. Companies have way way too much money invested in internal applications that run on Windows. Unless they run against their virtual desktop, iPad can't run any native software. If you spent 10 million dolars building an internal app, would you buy hardware that can't run it? I see this every day. People have iPads there, they have them sitting on their desks turned off, resting, waiting to be useful, but from moment to moment they don't use them. Because, if you have to drag your laptop to a metting and are sitting with it open, are you really going toopen your iPad and finger type a message or check your email?
            A Gray
          • Need to get your story strieght

            "I work in fortune 500 and 100 companies all the time as a consultant. I have yet to see an iPad anywhere."

            " I see this every day. People have iPads there, they have them sitting on their desks turned off, resting, waiting to be useful, but from moment to moment they don't use them."

            So you never see them but see them sitting around all the time????
            KBabcock75
          • Same where I am

            People have ipad as some sort of lame status symbol, same as the isheep in the consumer world. For business they are about as useful as a doorstop!
            Claretbob
          • owning and squating are entirely different

            iPads have largely been issued to executives and higher ups as status symbols and are little more than toys for egos. With a few exceptions in some enterprises there's nothing of internal apps that runs on them not even internal web sites. The largest use is running GAMES. We went to the trouble to purchase and setup printers that were compatible and would work with iPads because it was "required" but nobody uses them.
            greywolf7
          • Nope. Wrongo.

            Think what you like. Hes not the only exception. A long way from it.

            You live in dreamland. iOS got the most press, its Apple, of course it gets the most press. I heard the silly stories on "mainstream news" jut today about the new iPhone unveiling. I only say silly because it is silly nobody gets that kind of press.
            Cayble
          • For many poeple, Windows Phone offers better solution

            I do not agree, that Windows Phone do not offer better solution. I am sure that for many not technical people Windows Phone is perfect solution and much better then Android. Maybe IPhone can be comprarable, but with totally different price tag. So I am very convinced, that for many people Windows Phone has much to offer and is better than competition.
            Dijkstra()
          • IOs "Owns" the enterprise maket?? "this is fact" ??

            Well, I would love to see these "numinous" sources ...

            This has me thinking about the definition of "the enterprise market" and what devices you're talking about ... if we define "the enterprise market" as set of devices and services that companies purchase as the primary and secondary working devices for their employees (we can include servers etc that run the enterprise but for the sake of argument I'll leave those out) to perform their jobs then I really can't see how that statement is true at all ... or heck even if the workers themselves bring their devices but to say "enterprise market" then they must be doing their work from the devices ... still ...

            But I'll be happy to be proven wrong.
            cordelllawrence
          • Apple iOS "owns" the the enterprise? --- huh???

            IOs "Owns" the enterprise maket?? "this is fact" ??

            Well, I would love to see these "numinous" sources ...

            This has me thinking about the definition of "the enterprise market" and what devices you're talking about ... if we define "the enterprise market" as set of devices and services that companies purchase as the primary and secondary working devices for their employees (we can include servers etc that run the enterprise but for the sake of argument I'll leave those out) to perform their jobs then I really can't see how that statement is true at all ... or heck even if the workers themselves bring their devices but to say "enterprise market" then they must be doing their work from the devices ... still ...

            But I'll be happy to be proven wrong.
            cordelllawrence