From the start, the various versions of Microsoft's (NASDAQ:MSFT) Surface Pro tablet have suffered from a bit of an identity crisis.
Were they meant to compete with Apple's (NASDAQ:AAPL) iPad? Were they supposed to be secondary devices for desktop and laptop users? Or were they meant to be laptop-killers -- full-function machines with a heavily improved laptop-like form factor?
With the release of the third version of Surface Pro (the aptly named Surface Pro 3), Microsoft has answered the question as to how it sees the device.
"It's the tablet that can replace your laptop. It is the most powerful, thinnest, and lightest Surface Pro yet. It is a full PC and a brilliant tablet," wrote Panos Panay, a corporate VP in Microsoft's Surface division on a company blog. He went on to explain why Microsoft believes the device can be a laptop-killer.
Our customers know that every Surface we've shipped was built to do more than other tablets, and how they use Surface validates that a tablet can be a great tool for productivity. Yet many people aren't ready to give up their laptops for tablets, and most people still carry both. When walking into a store, they feel they have to decide between a tablet for portability and entertainment or a laptop to really get things done. For the most part, tablets have been designed to be great for watching movies, reading books, playing games, browsing the web, and amazing for digital "snacking" with apps. Most laptops are designed to help you type term papers, write letters, work on big applications, work on spreadsheets, browse the web, create content, make movies... you name it. In designing Surface, we wanted to design a device that can marry the power of the full PC without compromising the sleek finish, elegant look and feel, light weight, thinness, and great battery life that we expect from a tablet.
That sounds great if customers accepted that logic, but the slow sales start for the Surface line in general suggests that Microsoft faces an uphill battle with the Surface. Tablets running Microsoft's Windows software, including the Surface, accounted for less than 4% of tablets sold worldwide last year, according to research firm IDC.
The Surface line has problems
All the Surfaces in the Pro line run a full version of Windows 8.1. Microsoft also offers a version of the Surface that runs Windows RT, a slimmed-down tablet version of Windows 8.1. Surface models in the Pro line can run any Windows software like a regular computer, while the RT Surface can only run apps written specifically for it. All models come pre-installed with Microsoft Office. (The version on the RT machines is technically specifically written for the slimmed-down OS but the user experience is the same.)
Further confusing things is that Microsoft still sells most previous versions of the tablet. The original RT Surface costs $299, while the improved Surface 2 running RT starts at $449. The Surface Pro 2 is still listed on Microsoft's Surface website starting at $899, which is more than the just-announced Pro 3, which starts at $799 (though you can expect Microsoft to adjust the price on the older version).
Surface users must also pay for the tablet's innovative cover/keyboard. The "Touch" cover costs $199 while the "Type" cover, which has a key feel closer to a traditional keyboard, comes in at $129. Only a type cover has been announced for the Surface Pro 3, which has a larger (12-inch) screen than its predecessors ... which likely means it won't work with previous versions of the cover/keyboard.
As an owner and frequent user of the the original Surface who owns both a Touch and a Type cover, the devices are impressive but they take getting used to. The Touch cover is thinner with flatter keys that don't make the noise you get when hitting a key on a traditional keyboard. Typing with the Touch cover is fine for quick emails or basic tasks, but writing anything lengthy is difficult, even with practice. The Type cover is bulkier but offers a much better experience. It's still not as good as the keyboard on even a lousy laptop, but much better than the on-screen typing offered on most laptops and it's an improvement over the cases/Bluetooth keyboards offered for other tablets.
The Surface Pro 3 also comes with a pen that can be used to write on the touchscreen, which is a new feature.
Still some analysts think Microsoft's new tablet is the right product at the right time.
"The weight, battery life, flexible kickstand, active stylus, and other features sound incremental but, taken together, make the new Surface a formidable market competitor — lighter than a MacBook Air, more full-featured than an iPad," Forrester analyst J.P. Gownder told USA Today.
The idea is good, but does anyone want one?
Marketing the Surface Pro 3 as a laptop alternative makes sense because it's too expensive to be a serious player in the tablet market. Yes, it's more of an actual computer than an iPad Air, but a $799 starting price is a lot higher than the $499 Air starts at ... and a lot more than the going rate for a decent, lightweight laptop.
The Surface line offers an elegant unbelievably lightweight alternative to the current generation of laptops, but the high price may stop it from supplanting traditional laptops. It's possible to replace a regular machine with a Surface Pro. In general I use the original Surface as a laptop replacement when travelling (unless I expect to be doing heavy writing on my trip), but I'm not sure an audience exists that will pay a premium for the slight conveniences the Pro 3 offers over less expensive laptops.
Microsoft has built a very impressive device to serve as the flagship of a highly innovative line, but whether there are any buyers for Surface 3 -- at least at $799 -- remains a question.
Daniel Kline is long Microsoft. He has owned a Surface since the day the product was launched. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft. 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.