Microsoft Surface Pro 3 Takes Aim at the Macbook Air -- Again

Microsoft's (NASDAQ: MSFT  ) latest ad campaign pits its Surface Pro 3 against Apple's (NASDAQ: AAPL  ) Macbook Air. Emphasizing its superior specs, utility, and customization, Microsoft appears bent on selling its latest laptop/tablet hybrid to would-be buyers of Apple's Ultrabook.

Although the Surface Pro 3 comes out ahead in several key areas, it doesn't seem likely to unseat Apple's Macbook Air.

Jack of all trades, master of none
Microsoft's most recent ad, titled "Power," emphasizes the Surface Pro 3's unique capabilities. Unlike Apple's Macbook Air, Microsoft's Surface Pro 3 includes a touch screen, a stylus, and a kickstand -- it is, as Microsoft repeatedly emphasizes, the "tablet that can replace your laptop."

Although the Surface Pro 3 is a dramatic improvement over its predecessors, major reviews have found fault with the device, particularly in the context in which Microsoft has chosen to present it. Compared to other laptop/tablet hybrid, the Surface Pro 3 is unmatched, but when compared to Apple's Macbook Air, it comes up lacking.

Re/code's Katherine Boehret, in particular, took issue with the comparison, declaring bluntly that the Surface Pro 3 didn't stand up to the Macbook Air. As a tablet, the Surface Pro 3's size is a hinderance -- and as a laptop, it's makeshift keyboard is a severe limitation.

Microsoft's money-losing Surface
From a business perspective, it's become difficult to tell what Microsoft hopes to accomplish with the Surface -- it hasn't made the company money, and seems only to have weakened the Windows ecosystem.

Microsoft may wish to brand the Surface Pro 3 an alternative to Apple's Macbook Air, but in reality, it could be far more threatening to other Windows-powered Ulrabooks. Responding to Microsoft's recent shift into hardware, Hewlett-Packard's CEO branded Microsoft an outright competitor; Acer has made similar remarks in the past.

At its best, the Surface Pro 3 appears to perfectly embody the spirit of Windows 8 -- one device for an operating system that can do just about anything. But if recent reports prove true, Microsoft may be moving away from such a strategy: Windows 9, due out next year, is rumored to reverse many of the changes Microsoft made to Windows, including bringing back the start button, doing away with the charms bar, and removing the Metro interface from Windows-powered desktops.

It's difficult to tell exactly how much Microsoft has lost on its Surface venture, but ComputerWorld recently estimated that it may be as much as $1.7 billion. To be fair, that's not much to a company with $85 billion in the bank, but it's certainly not a positive.

Mac market share is steadily increasing
"Our competition...is confused," Apple's CEO Tim Cook said last year in an obvious reference to Microsoft's Surface. "They're trying to make PCs into tablets and tablets into PCs."

As Microsoft struggles to find a market for its Surface, Apple's Macbooks have only become more popular. Mac market share has steadily risen over the last decade, and its growth in the U.S. has picked up in recent quarters.

Apple's Macs now consistently account for more than 10% of the U.S. PC market, and at times has defied the general slump in PC sales -- last holiday quarter, for example, Apple's Macs outpaced the larger PC market by around 36 percentage points, according to research firm Gartner.

The Macbook Air, in particular, appears to have been instrumental in the Mac's recent resurgence. Apple's share of the U.S. PC market broke above 10% for the first time in recent history in the third quarter of 2010, just a year and a half after the first-generation Macbook Air debuted. More recently, research firm NPD reported that the Macbook Air accounted for 56% of the Ultrabooks sold in the U.S. during the first five months of 2013.

Unfortunately for Microsoft, the Surface Pro 3 does not appear to be the device to reverse that trend. Perhaps consumers will be swayed by this recent advertising blitz, but if history is any guide -- Microsoft allegedly spent more than $1 billion advertising Windows 8 and the original Surface in 2012 -- that seems unlikely.

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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 August 30, 2014, at 12:59 AM, don1941t wrote:

    No surprise that mac sales are up -- if you are going to write apps for the iPhone or iPad, you need a platform to use for development. and then you have to have the target device as well. With the popularity of apps and the growing developer market it's no real surprise to see growth. but how long can it last?

  • Report this Comment On August 30, 2014, at 8:56 AM, symbolset wrote:

    Agree with the author. But what is Microsoft to do? Hold their Surface up against the ultrabooks of their hardware partners? That isn't going to win them any friends. Apple at least doesn't make Windows PCs.

  • Report this Comment On September 04, 2014, at 5:07 PM, eewhiz wrote:

    The author seems a bit confused here...he is calling a MacBook Air an Ultrabook. Last time I checked, the MB Air does not have a touchscreen (one of the requirements per Intel to be called an Ultrabook).

    Many MacBook Pro users have tried the Win8 environment, and actually believe the evolution of the touchscreen on a laptop is a nice edition (pinch/zoom, quick scrolling etc) to the stale laptop experience.

    Let's face reality here, MacBook Air sales are up because the majority believe they are buying a luxury device, and want that "Glowing Apple" logo to shine brightly at Starbucks... it says "look at me, I can afford an Apple product":

    My 2 cents worth...

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