Microsoft Wants Its Surface Pro 3 To Replace Apple Inc’s Macbook Air, Literally.

Even in the post-PC era, there isn't a lot of love lost between tech giants Apple (NASDAQ: AAPL  ) and Microsoft (NASDAQ: MSFT  ) .

Source: Microsoft

The roots of their bitter rivalry go back decades to Apple co-founder Steve Jobs' claims that Microsoft copied many key aspects of Apple's software on its way to becoming the world's preeminent PC software supplier.

Things between the two rivals appear to have cooled lately. Microsoft largely missed the boat in mobile, while Apple repeatedly revolutionized the space to great success. However, though Apple is likely to remain well ahead of Microsoft in this new computing paradigm, don't expect Microsoft to sit idly by.

Microsoft's trade-in tactics
When it unveiled the new Surface Pro 3 in May, Microsoft leaned heavily on the idea that it was a "laptop replacement," rather than just a tablet. And now, Microsoft's putting its money where its mouth is.

For the month of July, Microsoft recently unveiled an new trade-in program in which it will provide customers who trade in select Apple MacBook Air models with a $650 in-store credit toward the purchase of a Surface Pro 3. Microsoft's least expensive Surface Pro 3 running Intel's i3 processor will retail for $799 before adding the extra cost of Microsoft's type cover, so Microsoft's seemingly willing to eat as much as 81% of the total purchase price for its least costly Surface in order to incentivize Apple MacBook users to switch from their current iDevices. If that's not wanting new customers badly, I don't know what is.

Microsoft brimming with brinksmanship
Point of fact, we've seen this kind of aggressive Apple poaching behavior before from Microsoft. Late last year, Microsoft offered potential customers a

Source: Apple

$200 gift card upon trading in select Apple iPads for one of Microsoft's Surface tablets.

It's easy to dismiss this as an act of desperation on Microsoft's part. Moves such as these certainly make for good copy. But there's also a genuine business strategy behind Microsoft's explicit Apple poaching practices: It all comes down to Apple's uber sticky ecosystem and legendarily strong brand.

Apple's customers are famously loyal, and the sad fact is that Microsoft's fighting a genuine and significant uphill battle as it attempts to carve out a slice of the mobile computing market for itself, especially at the higher end where Apple's particularly well represented. Apple customer loyalty numbers vary from survey to survey, with some studies claiming brand loyalty as high as 80% and even 90%. But the overarching truism Microsoft's trying to counteract here is that once you go Mac, you tend not to go back. With these kinds of offers, Microsoft's hoping it's created a powerful enough economic incentive to break the bonds of Apple loyalty. Microsoft certainly has the financial firepower to try to subsidize users switching costs from Apple's MacBook to Microsoft's Surface Pro 3.

Ultimately, though, the sad fact for Microsoft in this scenario remains that consumers will only stay on a platform that can win on features alone, so Microsoft's subsidization strategy could only last for one device cycle unless it can strike a chord with the bulk of consumers that opt in to this program. Either way, this kind of move shows how badly Microsoft wants to crack Apple's valuable computing franchise with its Surface Pro 3. Does it stand a chance? We'll have to wait until next month to see firsthand.

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Read/Post Comments (9) | Recommend This Article (3)

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  • Report this Comment On June 24, 2014, at 11:38 PM, peanutgalerygeek wrote:

    'Yer kiddin' me, right? That can't be it. The three year old Macbook Air that I am using right now is probably the best laptop I've ever owned. It's simply a thing of beauty and is a pleasure to use. I've been buying laptops since the mid 80s so I know a little bit about what I'm talking about.

    Microsoft might have a strategy but replacing the Macbook Air ain't it.

  • Report this Comment On June 25, 2014, at 4:46 AM, secularinvestor wrote:

    Somebody in MS’s marketing department should be fired.

    Not only is it highly unlikely that any but a minuscule number of MacBook Air users are likely to be tempted to downgrade to Surface, but this offer sends a loud and clear message that even MS knows the Macbook Air is superior - so the only way to try and persuade Air users to downgrade to a Surface is by offering a massive bribe, which almost certainly won’t work.

    We can see that MS’s earlier similar offer to persuade iPad users to downgrade to the Surface was totally unsuccessful. Chitika’s latest survey which shows that the iPad has over 77% US market share, while the Surface has declined to only 1.6% - despite all their ;massive loss making discounts and give away offers.

    The simple fact is that Apple’s laptops have been continuing to gain market share because they achieve by far the highest user satisfaction rates and are widely considered to be superior, while Windows PCs have been losing market share, despite heavy discounting.

    Silly offers like this by MS just serve to confirm in the minds of consumers that users prefer Apple’s thorough bred Macbook Airs and iPads to the awful Surface hybrids.

  • Report this Comment On June 25, 2014, at 5:47 AM, kosmickowboy wrote:

    Microsoft may want to replace the MacBook Air with a Surface, but I doubt they will replace more than a dozen. I guess they haven't figured out price is not why people buy a MacBook instead of a Windows device. This will just have Microsoft losing money on each unit they give a $650 discount and within a year the customer will revert back to a MacBook. No antivirus to deal with, it works like charm, no need to regularly reboot ... to name a few pros for MacBooks.

    Microsoft needs to come up with some creative features and address reliability and quality issues that have been a mainstay of Windows. Then they won't need to take a loss on a Surface to take a MacBook out of circulation.

  • Report this Comment On June 25, 2014, at 7:30 AM, jdmeck wrote:

    Desperation. Goodbye MS.

  • Report this Comment On June 25, 2014, at 9:37 AM, photofinish wrote:

    Agreed this might not be the best marketing strategy for Microsoft but I think at this point, Apple is superior in only marketing, not product and certainly not quality. I look forward to the day, which is coming soon, when I will be free of my Apple/Mac products. Every time I do an OS update, yet another non-Apple program that I have fails. I suppose because they do both hardware and software, Apple has little interest in OS compatibility with other programs (i.e. Photoshop, which is state of the art for photo editing). So I give up, I'm finished with the battle. I'll be going back to PC.

  • Report this Comment On June 25, 2014, at 10:04 AM, bnquail wrote:

    After years of struggling with windows pc's, I finally switched to a macbook air. I wouldn't trade it for two surface pros. Here's the thing. If you have a full keyboard and touchpad, you don't need a touch screen. At the end of the day, a mac just works better and smoother than anything ms makes.

  • Report this Comment On June 25, 2014, at 10:23 AM, RussBinder wrote:

    I don't understand the big idea here. What is MS going to DO with the old MB Air? Into the e-waste bin, I'm sure. So, rather than F-around, why not save themselves the recycling headache and just drop the price to the same level as the trade in, and get on with it for EVERYONE?

    I'd like to have a Surface 3, with the i7 and all the memory and big screen and all, but it simply costs TOO MUCH MONEY and it isn't going to be any more bounce-proof durable than my iPad.

    Someone with a consumer perspective needs to give MS engineering a SERIOUS tune-up.

  • Report this Comment On June 25, 2014, at 11:17 AM, ClamChowder wrote:

    The sad fact is that Microsoft still, after at least a decade, hasn't figured out that Tablets and Laptops are distinct products, and can't effectively be combined.

    As with automobiles and motorcycles, when you try to make a hybrid, you end up with something that doesn't work as well as either, and only appeals to a fringe market.

  • Report this Comment On June 25, 2014, at 12:39 PM, jdmeck wrote:

    Microsoft has no vision. They never have. Their Windows Products were conceived by Steve Jobs. It was his vision he hired Bill to bring to life. Bill took what he did for Apple and turned it into Windows. Excel and Word were developed for Apple computers, again directed by Steve. Without Steve there might not even be a Microsoft today.

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Andrew Tonner

Andrew Tonner is a tech specialist for The Motley Fool. He is a graduate of The University of Arizona with a degree in Finance.

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