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Will Microsoft's Surface Pro 3 Finally Break Big in the Tablet Market?

On Tuesday, May 20, Microsoft (NASDAQ: MSFT  ) unveiled its forthcoming Surface Pro 3 tablet. Though the company is still trying to make a major impact in the tablet market, the reveal of the Surface Pro 3 came with a pretty bold claim: "This is the tablet that can replace your laptop."

The Surface Pro line has walked a line between tablets and laptops since its inception, trying to offer the benefits of both and at times coming across as a strange hybrid of the two. Microsoft's Panos Panay, head of the company's Surface division, thinks that his team has gotten it right this time, however; after making the above claim, Panay reinforced his conviction by saying, "Today we take the conflict away, and I'm absolutely sure of it."

The Surface Pro 3
With the Surface Pro 3, Microsoft seems to be targeting those users who own both a laptop and a tablet because neither device fully meets their needs. The new Surface Pro is the largest Surface tablet to date, featuring a 12-inch touchscreen. This is featured on a tablet form factor that is only 9.1 mm thick and that is lighter than Apple's (NASDAQ: AAPL  ) smallest MacBook Air laptop. As with other Surface tablets, the Surface Pro 3 will feature removable keyboard covers for ease of typing in "laptop" mode.

As an evolution of the Surface Pro product line, the new tablet goes even further into the hybrid space. The larger screen will make it much easier to work and browse on than previous models, but this is a trade-off for the portability and ease of use that tablets have traditionally enjoyed. While the new tablet is light and thin for its size, it's possible that this size may turn off tablet users who prefer something a bit smaller and more portable.

The MacBook Air comparison
Given the long-standing rivalry between Microsoft and Apple, it's not surprising that most of the comparisons between the Surface Pro 3 and laptops are being made against the MacBook Air. Even Microsoft made the comparison during the reveal, placing the Surface Pro 3 and a MacBook Air on a scale to show that the new tablet was lighter. Many of the new tablet's features (and even its price points) seem aimed at competing with Apple's MacBook Air offerings, while also providing users with features such as a tablet mode and touchscreen that the MacBook doesn't provide.

Mashable did a direct comparison of the Surface Pro 3 and the mid-2014 MacBook Pro, focusing on those points that overlap between the two to see whether the new Surface provides a significant value over the MacBook Pro. While the Surface Pro 3 does hold up well in comparison to Apple's laptop, there's little if any price advantage there; the entry-level Surface Pro 3 doesn't have an equivalent MacBook Pro to compare to, and the comparable versions actually sport very similar price tags. In fact, when you look at high-end Core i7 offerings, the MacBook Pro actually comes out at a bit of a discount over the Surface Pro 3.

Is the demand really there?
When it comes down to it, the success or failure of the Surface Pro 3 will depend on whether the demand is really there for a large-form-factor tablet that can take the place of a laptop. This was the same demographic that Microsoft attempted to target with previous versions of the Surface Pro, and as yet the line hasn't made a massive dent in sales. In its most recent quarterly report, Microsoft bragged about how Surface sales had grown 50% to $500 million. Given that Device and Consumer revenue came in at $8.3 billion for the segment, however, the Surface product line still only represents only a small portion of Microsoft's consumer product income.

Most likely, the Surface Pro 3 will see Microsoft continuing to slowly grow its tablet sales offerings. I'm not expecting a huge jump in tablet sales once it's released, however. If it doesn't have as big of an impact as Microsoft seems to expect, a "mini" Surface may be introduced down the line as well to see whether bigger isn't always better in the battle for tablet sales.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 23, 2014, at 12:52 PM, Drichter wrote:

    The price comparison quickly tips vastly in favor of the surface pro 3 when you consider that most users won't need a separate tablet and all that entails.

  • Report this Comment On May 23, 2014, at 1:23 PM, TexasNeuron wrote:

    Will Microsoft's Surface Pro 3 Finally Break Big in the Tablet Market? - No

  • Report this Comment On May 23, 2014, at 6:01 PM, chilero wrote:

    I've never seen so much positive press about a Microsoft product before. Early reviews are all very positive. The key to big sales will be enterprise.

    I may even sell a couple of Apple shares and get one.

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John Casteele

John Casteele is a freelance writer, editor, and occasional web cartoonist. He prefers long-term investments, largely in retail, medical, and tech.

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