Too Little, Too Late, Microsoft

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Microsoft (NASDAQ: MSFT  ) is hoping that the second time's the charm.

The world's largest software company announced on Tuesday that Surface Windows 8 Pro -- the company's more powerful sibling to the reportedly poor-selling Surface Windows RT -- will hit the market in two weeks.

Unlike the Windows RT tablet that was limited to RT apps, Surface Windows 8 Pro is as close as one can get to Windows-fueled notebook. Intel's Core i5 processor provides the processing power to take on Windows 8 and Windows 7 desktop applications.

Microsoft will be selling the new tablet on Feb. 9 though the same outlets in the United States and Canada that seem to be taking a bath by stocking the Surface Windows RT. Despite expanding from its namesake stores and website by mid-December to include Staples and Best Buy, analysts continue to lower their projections on Surface tablet units sold during the holiday quarter.

In retrospect, Microsoft should've done this the other way around. Surface Windows RT has flopped because it doesn't run older Windows software yet is priced as high as an iPad.

The new model costs quite a bit more, starting at $899, but at least it's comparable in functionality to similarly priced ultrabooks and svelte laptops. The fatal flaw in putting out the Windows RT version first is that the Surface brand is now associated with failure. We'll never know how things would've played out if the more productive tablet had led the way, followed by the cheaper Windows RT model.

We'll see how forthcoming Microsoft is on Surface sales when it reports on Thursday.

The one potential knock on Microsoft's second tablet is that its battery life may be more like a laptop than a tablet. It's the trade off in going with the powerful Intel chip that can run legacy Windows software. Will somebody really want a tablet with half the battery life of traditional tablets?

There's also the problem with the price. An $899 tablet is extreme, and the price tag jumps into the four figures if you want the keyboard cover that turns it into a quasi-laptop. There's also a mouse, but it will set you back $70. Really, Microsoft?

We should know pretty soon if the product is a hit or a miss. Now that Staples and Best Buy are on board, analysts will get a quick read on the new tablet's reception. It's not a coincidence that analysts began slashing their Surface Windows RT projections shortly after the office supply superstore and consumer electronics retailer began stocking them.

Microsoft can't afford to miss a second time, and it knows it.

Hard times at Microsoft
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.

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  • Report this Comment On January 28, 2013, at 11:35 AM, techy46 wrote:

    Hey fools the Lenovo's Yoga 13 Ultrabook with i3-i7, 128-256Gb, microSD and 13" touch has been sold out thru the Holidays selling at $999-1400 and it beats the Surface Pro at being a notebook and tablet. It's not Windows RT's fault that you can't run an X86 based app on an ARMH processor. You analysts would be critical of MS if they sold a Surface that ran all apps for $199 wouldn't you.

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