Microsoft's (NASDAQ: MSFT ) Surface Mini was supposed to launch last month. The smaller version of Microsoft's tablet has been talked about for quite a while, and nearly all industry watchers expected it to be unveiled at the May press event. It wasn't.
At the last minute, management reportedly backtracked on its plans to unveil the device. CEO Satya Nadella and devices chief Stephen Elop didn't feel confident enough in the product's success, so they pulled it at the eleventh hour. Instead, Microsoft erased all references to Surface Mini ahead of the event, and Surface head Panos Panay showed off the Surface Pro 3.
But Microsoft missed a spot.
Microsoft posted a user manual for Surface Pro 3, but it forgot to purge the manual of numerous references to Surface Mini, including the one shown here. Other than passing references, not much was detailed about the smaller tablet. Microsoft has since taken down the user manual.
Rumors had suggested that it would carry a Qualcomm Snapdragon processor and run Windows RT, Microsoft's controversial watered-down operating system. Realistically, not launching the Surface Mini was likely the right call to make, as Windows RT has a horrendous track record in the market. Every single third-party OEM had abandoned the platform because of consumer confusion.
The last manufacturer to introduce a Windows RT device other than Microsoft itself was Nokia (NYSE: NOK ) -- whose devices business now belongs to Microsoft. That means that Microsoft is officially the only company selling Windows RT devices.
ARM Holdings-based chipmakers had high hopes for Windows RT, believing it could give them exposure to desktop PCs and nudge in on Intel's turf. Unfortunately, the lack of legacy app support combined with unclear messaging have doomed the platform.
When Microsoft chose not to launch the Surface Mini, some saw it as possible indication that the company was shifting focus away from the consumer market. However, Microsoft is probably just taking a different approach.
Just days after the May event, Microsoft announced Windows 8.1 with Bing, specifically noting that it would allow hardware partners to build low-cost devices. This version of Microsoft's flagship operating system is available only through OEM-made devices, and Microsoft has either eliminated or significantly reduced the licensing fee. The company will try to make up for that lost revenue with services and advertising.
Dead or delayed?
Surface is growing as a business for Microsoft (Surface revenue grew 50% last quarter to $500 million), but one of Surface's main strategic purposes is to provide an example. It's a not-so-subtle reminder to OEMs that Microsoft is willing to take matters into its own hands if it doesn't think they're doing a good job. In this sense, the smaller Windows tablet category still needs a leader. There are some devices in this market segment, but none are as prominent as Apple's iPad Mini or Google's Nexus 7.
Using Windows RT is probably a mistake, but a Windows 8 version of a Surface Mini does make sense. The device probably isn't dead; it's probably just getting a makeover.
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