Microsoft's (NASDAQ:MSFT) Surface Book is a hit. Critics have been nearly unanimous in their praise for the device, which Microsoft has characterized as the "ultimate laptop." Given its price, the Surface Book is unlikely to sell in large quantities, but it could help reinvigorate interest in the Windows platform and boost Microsoft's top and bottom lines.
A high-end laptop with unique features and few compromises
Reviews for the Surface Book have mostly emphasized the same points: If you can afford it, it's a great PC with some unique features. It's among the best laptops on the market, and it gives the Windows platform a high-end machine capable of challenging the MacBook Pro.
- "[The Surface Book is] so good I might switch back to Windows." -- Gizmodo
- "The really unique and interesting part of the Surface Book is the new fulcrum hinge ... it looks awesome, like something out an Alien movie." -- The Verge
- "[An] illustrator who works both on paper and in programs such as Photoshop... was impressed by the feel of the Surface Pen and especially its eraser." -- CNet
- "The Surface Book combines speed, precision and a killer display without sacrificing battery life." -- The Wall Street Journal
- "Microsoft's laptop is all about horsepower: fast performance, robust graphics and unmatched battery life." -- Engadget
Still, there were a few complaints, mostly surrounding the trade-offs Microsoft made in an effort to deliver the Surface Book's signature feature. The Surface Book isn't a pure laptop, but rather a convertible -- its screen can detach and double as a stand-alone tablet. Among high-end machines, there's no other device quite like it, but it does introduce a few shortcomings.
- "If I were designing the ultimate laptop, it would not have the unsightly gap between the screen and base visible here when the clamshell is closed; nor would it weigh about 3.5 pounds." -- CNet
- "The display wobble can be irritating, and the weird gap when it's closed means I have to clean the Surface Book every day." -- The Verge
- "If you're hunched in the corner of an airport, lying on your bed, or splayed out on your couch, you're going to run into problems owing to the Surface Book's screen-heavy weight distribution." -- Gizmodo
- "The tablet alone didn't last more than 2.5 hours in my battery test, which loops a series of websites with brightness set around 65%." -- The Wall Street Journal
Truly a halo device
But the most overwhelming negative -- at least from a buyer's perspective -- is its price tag. It's simply too expensive for most buyers, and its appeal will likely be limited to a relative handful of professionals and enthusiasts. The Surface Book starts at $1,499, and some configurations runs upwards of $3,000. Historically, Windows laptops have sold for around $400-$700 on average. Even Macs, which are more expensive than most Windows laptops (the least expensive MacBook Air starts at $899), don't often break the $1,500 mark. Last quarter, the average Mac sold for just over $1,200.
Nevertheless, the Surface Book still serves an important role for the broader Windows ecosystem, giving Microsoft a halo device for discriminate consumers, and something its OEM partners can hopefully replicate at more affordable price levels. Until the Surface Book, buyers looking for high-end Windows laptops had few options. There are plenty of powerful, expensive Windows machines, but they usually compromise on design, trackpad, or battery life.
Boosting Windows and Surface revenue
Last quarter, Microsoft's Surface business generated $672 million. That was down sequentially, but Microsoft's management offered a plausible explanation: Buyers were waiting for the company to unveil new hardware. Surface Book and Surface Pro 4 weren't available last quarter, and weren't reflected in Microsoft's results. But when Microsoft reports earnings in January, a sharp rise in Surface revenue should be expected.
Unfortunately, Microsoft doesn't break out Surface profitability directly, but has said its Surface Pros have been profitable on a gross margin basis in the past. Given its high price, the same is likely true for the Surface Book. Strong demand for the machine should benefit Microsoft's bottom line then, but the positive effects on the Windows ecosystem should be more significant -- although harder to detect. At long last, there's finally a Windows machine with impeccable hardware.
Sam Mattera has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.