So I Almost Bought a Surface

There I was, on a Sunday afternoon, with a big decision to make.

I was standing in front of Microsoft's (Nasdaq: MSFT  ) Surface, and I liked what I saw. Should I spend $499 on the software giant's hyped tablet? OK, so it would have been at least $599, because who can buy the tablet without springing for the magnetically attaching keyboard that's the star of the Surface's infectious marketing campaign?

All right, all right -- it would've been at least $629, because the wafer-thin touch keyboard just wasn't working for me. I'd have to go with the more traditional mechanical keyboard cover.

And the math wasn't the only thing gnawing at my brain.

I was critical of the Surface, and one of the five reasons why the Surface may fall short is that a better Surface -- one that actually runs the x86 programs that PC users expect to run on Windows -- will be out a few months from now. Yes, there's the slightly scaled-down, RT-based preview version of Microsoft Office that's included with today's model. However, I had the feeling buyer's remorse would kick in.

I also didn't see a lot of buying.

When I heard that one of Microsoft's pop-up stores was opening nearby over the weekend, I figured I'd check it out. I wasn't entertaining a purchase, but I wanted to see what was happening. I wasn't expecting the mass of people that the Apple Store -- just about 30 to 40 yards away -- attracts at Dadeland Mall in Miami. I also wasn't expecting the sort of queue that formed outside of Microsoft's flagship Times Square shop. Again, this was also on a Sunday. Microsoft's Surface was already on the market for two days.

However, my initial reaction was nonetheless disappointment. Although I realized the temporary nature of a pop-up store meant that it wouldn't be extravagant, I expected to see at least the sort of seasonal effort shown by the Spirit stores that spring up every Halloween in vacant store slots.

But I didn't. The pop-up "store" was just a kiosk in the middle of the mall. It may have been a bit bigger than the usual kiosks selling smartphone cases, cleaning utensils, or remote-controlled helicopters, but it really was little more than a square counter with a dozen or so Surface display models.

Photo: Rick Munarriz.

Yes, there were people gathering around the tablets. I even saw an actual sale take place. However, despite the enthusiastic employees and slick display models, it was mostly curious mall-strollers kicking the tires before moving on to the food court.

This is a problem, because Microsoft is offering its tablet at comparable prices to Apple's (Nasdaq: AAPL  ) iPad. Running an RT version of Windows Office natively and a keyboard that clicks into place magnetically won't be enough to counter Apple's ecosystem, which now has hundreds of thousands of iPad-specific applications.

Yes, Netflix (Nasdaq: NFLX  ) introduced a Windows 8 app last week that also works on Surface (and other Windows 8 tablets), but where is everybody else? Isn't Microsoft an investor in Facebook (Nasdaq: FB  ) ? Why do I need to fire up Facebook in a browser? Didn't Microsoft agree to a nine-figure investment in Barnes & Noble (NYSE: BKS  ) ? Where's the Nook application? There is, however, a Kindle app.

The lack of developer support is serious, and it may not get better right away. What developer would spring for an RT solution until it knows that this thing will actually begin selling outside of Microsoft's website and a few dozen Microsoft stores around the country?

I don't mind paying a premium as an early adopter, but the signals are mixed here. If I can get a better Windows 8 tablet in a few months for a bit more, or if slow sales will make these tablets cheaper sooner rather than later, I don't need to be that early of an adopter.

I'm probably not the only one feeling this way.

It's been a frustrating path for Microsoft investors, who've watched their company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In this brand-new premium report on Microsoft, our analyst explains that while the opportunity is huge, the challenges are many. He's also providing regular updates as key events occur, so be sure to claim a copy of this report now by clicking here.

Longtime Fool contributor Rick Aristotle Munarriz owns shares of Netflix. The Motley Fool owns shares of Apple, Facebook, Microsoft, and Netflix and has the following options: long JAN 2014 $20.00 calls on Facebook. Motley Fool newsletter services recommend Apple, Facebook, Microsoft, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On October 29, 2012, at 11:28 PM, RandomMeaning wrote:

    I wonder if Microsoft would have been better off selling the Surface exclusively over the internet like Amazon does with the Kindle. Avoids the expense of renting space for a pop up store and staffing it but more importantly, the potential customer doesn't get to try it out. Pretty pictures of happy people might actually convince some that it will actually do what they hope it could. But when the try it they are quickly faced with the fact that it really only works decently with an expensive keyboard on a table. Certainly not in your lap or in bed. Also they don't realize until too late the bugs and lags of the OS and installed apps

    If it's over the internet then "too late, you've already got it!" If you change your mind you have to go through the bother of shipping it back and checking your account to see if the refund went through. I think Amazon was on to something there.

    Of course, the Apple Store gathers crowds because it's full of fun and powerful devices that work great for work and play. Apple has thrived because of the try and buy model. Microsoft has thrived because of the "I need it for work" model, a paradigm which is shifting away from pure Microsoft.

  • Report this Comment On October 30, 2012, at 2:00 PM, Turfscape wrote:

    We howl and roar over who runs the White House...but a more serious impact to our pocket books is who runs the companies in which we invest. Where are the howls and roars to remove Ballmer as CEO. This man should not be running Microsoft. He is a salesman, not a CEO.

    Microsoft needs to check its focus. This is a company that grew based on the strength of its software...now it pretends to be a software company, hardware company, entertainment company, gaming company...had Microsoft pushed software for mobile platforms two years ago, the picture of the mobile environment would look very different today.

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