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Can Microsoft Go Pro in Tablets in 2013?

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Microsoft's (NASDAQ: MSFT  ) Surface Pro tablet, due for release in early 2013, is poised to represent the first real example of a tablet-laptop hybrid. Where tablets have been largely consumptive devices, the Surface Pro is designed to be a fully productive device that can replace both your laptop and your tablet. Living up to this claim will be a critical element of the success of the new offering from Microsoft, because the device will carry a hefty starting price of $900. Ultimately, the Surface Pro should be a game-changer -- not just for Microsoft, but also for the way we all approach mobile computing.

What's at stake?
In a recent report on the tablet industry, IDC projects that tablet sales will reach 122.3 million units in 2012, passing through 172.4 million in 2013 on their way to an expected 282.7 million units in 2016. If you were wondering whether tablets were a passing fad, the numbers would suggest otherwise. If these figures prove accurate, it means the tablet market will grow by an impressive 41% over the next year and never look back. These are important sales for Apple (NASDAQ: AAPL  ) , Google (NASDAQ: GOOGL  ) , Microsoft, and other tablet makers to capture.

In the same report, IDC projects that by 2016, global market share will be divided 49.7% for Apple's iOS, 39.7% for Google's Android, and 10.3% for Microsoft's Windows. Without getting behind the numbers, it is difficult to really understand the assumptions on which these projections are made, but if Microsoft is to have a chance to outpace these estimates, it will be by disrupting the market and changing the way tablets and notebooks are perceived. The feel of how quickly Windows and its growing ecosystem are being dismissed is reminiscent of the early days of Android. It seemed inconceivable that anyone could give the mighty iPhone and corresponding iOS a run for its money.

As of a recent report from IDC on smartphone OS market share, Android commands 68.1% of the global smartphone market, followed by iOS at 16.9%; Windows and Nokia's legacy Symbian OS stood at a combined 7.9%. Android's ability to be adapted for smartphones at all price points has been central to its ability to disrupt Apple's dominance. Travis McCourt of Raymond James explains that "there are parts of the world where a smartphone is simply a touchscreen with an effective Web browser, and in those parts of the world, Android is dominating."

It's time to get productive
The bulk of activities that are performed on Apple and Android-based tablets are consumptive: Users surf the Web, watch videos, read books, and listen to music. For most of us, when it's time to do some work and produce a paper, report, or presentation, we fire up our PC and buckle down. At the edge of this example is that to create an app for your smartphone or tablet, you must use a device other than your smartphone or tablet. PCs may be becoming less critical from a sales perspective, but they are still the primary source of production in computing.

Where the Surface has begun to push the tablet into the realm of notebook-tablet hybrid, the Surface Pro has the potential to bring the leap to full fruition. The already released Surface relies on an ARM Holdings (NASDAQ: ARMH  ) chip similar to the ones running the iPad, but the Surface Pro will include an Intel (NASDAQ: INTC  ) Ivy Bridge Core i5 processor; as Jennifer Bergen at Digital Trends puts it, "Surface Pro tablets are made from the same DNA as today's laptops and Ultrabooks." The device is a full-blown laptop masquerading as a tablet with the goal of redefining the entire personal computing space.

This leap forward that the Surface Pro represents is further illustrated in its ability to operate Microsoft software: "Surface RT tablets come with a mobile version of Microsoft's Office suite, which gives users the basic (but not all) functionality of the desktop version. Surface Pro tablets don't come with Office preinstalled, but they have the brawn to run the full program and not just the basic version." The only critical difference between a Surface Pro and a notebook will be the form factor.

While there will certainly be critics of the new device when it's released, the Surface Pro has more potential to move computing forward than any other device in recent memory. Anyone who thinks that is a very bold statement -- aside from being right -- should appreciate this caveat: It's too soon to determine whether the Surface Pro will be cutting edge or bloody edge. This is the distinction between the products that pave the way while becoming dull as they press into the wilderness and those that slice forward into consumer-electronics dominance; the Nexus One was bloody edge, where the iPhone was cutting edge.

Given the enormous potential of the new devices, I am a buyer of Microsoft ahead of the release date. The company is doing too many interesting things to be overlooked, and I'm a believer when it comes to the Surface Pro. It's too soon to measure the iPad for a casket, but it will be interesting to see how Apple reacts if the Surface Pro gains traction.

It's been a frustrating path for Microsoft investors, who've watched the 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 make sure to claim a copy of this report now by clicking here.


Read/Post Comments (9) | Recommend This Article (6)

Comments from our Foolish Readers

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  • Report this Comment On December 30, 2012, at 12:05 AM, SLec wrote:

    I am astonished to finally find an article about the surface pro where the writer actually understands the product and its potential. So many have failed at giving their readers the right info about this piece of tech. Great read, I will keep an eye on this site :)

  • Report this Comment On December 30, 2012, at 1:45 AM, applefan1 wrote:

    The Surface Pro is just another 'too thick" slab that isn't going to get dramatic sales.

    The problem with MIcrosoft's approach is that they think that people want a full blown laptop in a tablet. REALITY is that they don't.

    Tablets are basically a slimed down OS that is extremely easy to use, easy to develop apps, and they are an extension of a traditional desktop/laptop or they are simply replacing a manual process. Cash registers in a retail store, order processing for a server at a restaurant are two examples of how people can really use a tablet. In these two, and many other similar specific task apps, they don't need Office, they don't need a full blown OS, the use is VERY specific and tailored around someone standing up without a desk conducting business.

    People seem to have this notion that one system should "do it all". Well, I don't think they can. They can come close in some regards, but they all have their place and it's just figuring out what works and what doesn't. So far, Microsoft has not been successful in the "tablet" market and this Surface Pro is too thick, too heavy and just not something that is going to catch on very well in terms of market share.

  • Report this Comment On December 30, 2012, at 1:59 AM, emperor888 wrote:

    "The problem with MIcrosoft's approach is that they think that people want a full blown laptop in a tablet. REALITY is that they don't."

    Actually I do want a full blown laptop & cellphone on my tablet. That way, I only carry one device. instead of three!

    I used to carry a pager, cell phone & PDA. but that was combined by the smart phone.

    apple & google tablets are limited. can't surf all the web (no flash & java). Smart phones are worse. can't do much with it. That's why people who owns an ipad or android tablet also one either a mac or PC laptop or desktop.

    With surface pro, u get rid of two device - limited tablet & laptop/desktop for a single Surface. Hopefully in the future, they can include a sim card on the Surface, so u can get rid of your cell phone too.

  • Report this Comment On December 30, 2012, at 4:04 AM, summersnowflake wrote:

    If Surface Pro lives up to its promise of doing a good job for both content creation like a PC as well as content consumption anytime/anywhere like a tablet, then it will succeed. On the other hand, if it becomes neither here nor there, then i'll flop.

    I for one, would definitely want to try it out. I use a laptop and an iPad both for leisure and for work. iPad used to be a supplementary device to the PC when it first came out, especially when it comes to work. But now, I realize 80% of what needs to get done, including simpler productive work like responding to email and filling up forms on the web can be done without powering up my PC.

    However, I still cannot ditch my PC because of the remaining 20%. Those include working on a presentation, a spreadsheet, or even doing stuff with my vacation photos. It's just too hard or impossible with iPad. But it's really a waste for keeping a PC just for those reasons.

    Hence, if Surface Pro lives up to its promise, I'll use just one device.

  • Report this Comment On December 30, 2012, at 11:11 AM, techy46 wrote:

    The press is way too focused on Microsoft's Surface Pro and RT. You guys really need to take a look at Asus Vivotab, Dell's XPS 10 nad 12, HP's Elitetab and Lenovo's Yoga 11 and 13. These tablets along with Miicrosoft's Surface will slowly change the face of mobile PC's. The Lenovo Yoga's are the best and make the iPad look like a Cut the Rope and Draw Something toy. The FUD over Google's docs is also quite amusing giving their lame capabilities.

  • Report this Comment On December 31, 2012, at 5:01 PM, TheRealRacc wrote:

    Last time I checked, I was a real human being, and I've been waiting for what the Surface Pro will be since the iPad originally came out.

    MSFT stumbled pre-releasing the RT and for taking so long to get involved in the mobile market, but the Surface Pro will create yet another form factor which is everything iPad owners will wish they had.

  • Report this Comment On December 31, 2012, at 5:04 PM, TheRealRacc wrote:

    I also think that anyone who thinks we are close to having an "all-in-one" device (phone/computer/tablet) are getting a little bit ahead of themselves.

    The form factor has to be perfected before it becomes as mainstream as we would like. You should expect to own a PC and a mobile device (tablet or the yet-to-be-named Surface Pro form factor) for at least another few years.

  • Report this Comment On January 01, 2013, at 4:34 PM, Jomac11 wrote:

    REALITY is that I certainly DO want a full blown laptop on a tablet and am willing to pay the price if it does all it slated to do... I have been waiting 2 yrs for this.

  • Report this Comment On January 15, 2014, at 6:26 PM, duuude1 wrote:

    Do we care?

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