Can Microsoft Get It Right This Time?

Despite embarrassing sales, Microsoft (NASDAQ: MSFT  ) apparently hasn't given up on the Surface RT.

DIGITIMES is reporting that Microsoft will introduce a second generation of its maligned Surface tablet next month. NVIDIA will continue to provide the chips, according to the report, but the screen size will shrink from 10.6 inches to 8 inches.

The screen's not the only thing shrinking. The price tag of what may as well be the Surface RT Mini will be roughly chopped in half to the $249 to $299 range.

Price was the first of five reasons I singled out in predicting that the Surface RT would fail in October. It never made sense for Microsoft to match Apple's (NASDAQ: AAPL  ) iPad on price when is lacked developer support and the iOS stability and ecosystem.

Magnetically attaching keyboards and a touch-enhanced Windows RT version of Office Home and Student were never going to be enough.

Microsoft should've been this aggressive on pricing last year, even if it meant upsetting its hardware partners that were putting out their own Windows RT tablets. The Surface RT would've made a difference during the holiday shopping season. Now it has to worry about the market perception that Surface RT is doomed.

Industry tracker IDC reports that just 200,000 Surface RT tablets shipped during the first three months of the year. That's 0.4% of the market. Do you really think developers are going to support that platform unless Microsoft's cutting big checks to subsidize the support?

Microsoft has seen Apple's iPad Mini cannibalize full-sized iPads at a $329 price point. The cruel silver lining for Microsoft here is that there is apparently not much of a Surface RT market to eat into.

However, the Surface RT Mini will still be priced a lot higher than many of the smaller Android tablets. The brand also needs to recover, and that's a tall order in these tech cynical times.

Microsoft's Surface has problems and they run deep.

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  • Report this Comment On May 16, 2013, at 10:17 PM, marv08 wrote:

    "Microsoft has seen Apple's iPad Mini cannibalize full-sized iPads at a $329 price point. The cruel silver lining for Microsoft here is that there is apparently not much of a Surface RT market to eat into."

    Uh well, a stretch, even when qualified as "cruel", is still a stretch. The Surface is, by all means, the "next of KIN".

    Its only "stand-out feature" was Office (which only worked somehow with the attached keyboard and trackpad, touch based use was terminally hopeless). How scaling a useless keyboard and trackpad down even more to match a 8" device will (not) work... remains (not) to be seen. MS should drop this failure, or at least rename it to "Albatross RT".

    The Surface "Pro", while nothing "Pro" at all, is still a legitimate device. Put some more thought into the keyboard and stand (it has to work on a lap, it has to support multiple viewing angles), and it might get somewhere.

  • Report this Comment On May 17, 2013, at 4:27 AM, xgboix wrote:

    it's an RT......it will fail

  • Report this Comment On May 17, 2013, at 5:49 PM, GameBot wrote:

    Well it is about time Microsoft learned how to price a tablet.

    If (they will not) ship this device @ $249 and give a free 8" keyboard they have a hit.

    If they ship it for $299 with no keyboard (more like what they will do) , they will not sell at all.

    RT is a great OS, it provides just about everything, the problem is they have one OS too many. WP8 Win8 Win* RT. dump one.

    BTW I own a Surface RT, it is my surfing device and I lo longer use the phone in the house, before that, (already had 4 tablets) I would dick around with my phone on the couch, now it is always the Surface.

    OH, and of course they need 14" Surface Pro.

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