With Surface Pro 3 tablet, Microsoft (NASDAQ:MSFT) isn't aiming for the iPad or Android tablets so much as the entire laptop market. I think the new docking station (pictured above) is key to the strategy.
If you're at all like me, you work on a laptop that converts into a desktop equivalent once you've plugged in all the necessary peripherals: keyboard, mouse, external monitor, printer, and so on. Microsoft's Surface Pro 3 docking station is meant to offer all that, plus audio and Ethernet support.
The decline of the laptop
Laptops are already under assault from tablets. According to a March estimate from IDC, worldwide portable PC shipments are expected to decline 6.5% this year and grow modestly through 2018 -- but still not enough to reach 2013's total.
Yet, for Microsoft, it's actually worse than that. Gartner predicts that only 15% of Internet-connected devices shipped this year will run Windows. Surface Pro 3 is attempting to cauterize a bleeding wound, and slowing growth in the tablet market may be just the opportunity Mr. Softy needs.
According to IDC, tablet sales inched up just 3.9% in the first quarter as businesses held back on purchases amid declining demand among consumers. Apple, in particular, saw iPad shipments slip more than 16% year over year. Novel 2-in-1s such as the Surface Pro 3 may finally push corporate buyers to give tablets a try.
"Although its share of the market remains small, Windows devices continue to gain traction thanks to sleeper hits like the ASUS T100, whose low cost and 2-in-1 form factor appeal to those looking for something that's 'good enough'," said IDC analyst Jitesh Ubrani in a press release.
Cashing in on a megatrend
To be fair, Microsoft might not be the only one to cash in on this trend. Last year, backers funded a Kickstarter project for a product called DOCKr for turning an iPad into a laptop lookalike, while ASUS built an add-on keyboard for its Android-powered Transformer line that includes extra USB ports and HML support for connecting to an external HDMI monitor.
Any number of similar alternatives could challenge the Surface Pro 3. Or not. Either way, between lagging laptop sales and growing tablet fatigue, Microsoft may be launching its most sophisticated 2-in-1 at precisely the right time.
Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.
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