Can Microsoft create a new market with Surface Pro 3?

Microsoft Surface Computing chief Panos Panay talks about Microsoft's current and future Surface plans and positioning.
Written by Mary Jo Foley, Senior Contributing Editor

With the just-announced Surface Pro 3, Microsoft is trying to establish a positioning niche: A tablet that can replace a laptop.


Typically when a tech vendor tries to do this, officials there -- and/or the analysts who cover the market -- spend lots of time and often money in the hope of creating a new, sticky term for that niche. (Examples: phablet, private cloud.)

But Microsoft isn't going that route with its latest 12-inch Surface device. Company officials are calling the latest member of the Surface family a tablet. (Sorry, El Reg... they didn't go with your suggestion of "slabtop." Nor did they use the already-established "two-in-one" or ultrabook labels.)

"We are making a market," said Corporate Vice President of Surface Computing Panos Panay, during an interview that ZDNet's Ed Bott and I had with him right after yesterday's Surface Pro 3 launch in New York.

"We are still calling this a tablet," Panay said of the Surface Pro 3. "Tablets have not landed" and not really hitting the productivity sweet spot, Panay said. These days, "laptops are solving the problems that tablets did" because of better battery life/power consumption, weight and thinness, he claimed.

The external competitor on which Panay and his team have their sights set is Apple, as the premium prices and specs for the Pro 3 made clear. Microsoft is gunning to replace the MacBook Air and the iPad with the Surface Pro 3. But I'd argue there's another competitor at which Microsoft is taking aim with the new devices: High-end Windows ultrabooks like the Acer Aspire S-7 I purchased recently.

The intended audience for the new Surfaces are "consumer first, and premium," Panay stressed. He said Microsoft expects the product to do well with students and others interested in notetaking, but that the company isn't positioning the Pro 3 as a business device. (Update: That's because Microsoft is making the assumption that consumers increasingly are bringing devices to work. Of course, if a business wanted to order thousands of Surface Pro 3s for its users, Microsoft would be happy to fulfill that order.)

To take on these competitors, Microsoft is attempting to bring some unique attributes to its latest Surface devices. The new hinge and kickstand on the device will allow users a lot more viewing angles. The new Surface Pro 3 Type Keyboards add a magnetic band that provide a sloped and more stable surface, which is easier on the wrists when typing for extended periods.

And then there's the new digitizing pen that comes for free in the box with the Surface Pro 3's. Panay called the pen "a platform" during our interview and said to expect the Surface team to continue to invest heavily in the pen, going forward.

What else will the Surface team be focused on in the coming weeks and months?

"I'm designing a lot of devices with many different form factors and shapes," he said.

And among those potential sizes and shapes is an eight-inch mini tablet, he said. (Microsoft was expected to launch its Surface Mini at yesterday's self-described "small gathering," according to various sources, but nixed that announcement somewhere in the past few weeks.)

Panay said "we still think there's life" in the eight-inch tablet segment. "There are more opportunities there."

Panay confirmed there's also still a future for more ARM-based Surfaces beyond the Surface RT and Surface 2. It's also worth noting that Microsoft plans to stop making Surface Pro 2 devices and make the Surface Pro 3 the new Intel-based flagship sooner rather than later, according to Panay. (That might explain why most of the Surface Pro 2 models are currently sold out in its stores.)

Will Microsoft ever do a true laptop with a permanently-connected keyboard and flat and sturdy base? Panay said the Surface team "got pretty far with" a cover that would provide more of a tray-like bottom, but decided to nix it because it was too clunky and inelegant.

I, myself, hope they keep trying to find a way to bring something like this to market, as the Surface Pro 3, even with its "lappability" improvements still doesn't really work for me on my lap the way my Acer does.

I think Microsoft needs a name for this laptop-tablet hybrid category the company is attempting to carve out. Suggestions, anyone?

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