Surface 2: Could it be second time lucky for Microsoft's tablet ambitions?

Microsoft's tablet strategy has come under fire at every turn, but could it still turn things around? Caroline Donnelly ponders.

Microsoft’s battle to court tablet buyers with its Surface line of devices has been interesting to watch, with its pricing and go-to-market strategy leaving many observers bemused.

The software giant was first criticised for launching the range in October 2012 with the Surface RT, an ARM-based tablet that can only run a limited array of apps and doesn’t feature the full-blown Windows 8 OS.

If we’ve learnt anything from the BlackBerry Playbook and HP TouchPad debacles, PC buyers will only pay top whack for one type of tablet and that’s the iPad.

Microsoft proffered the more business-focused, x86-based Surface Pro as an alternative, but it took ages to be released. And, when it finally went on sale in February 2013, it came with an eye-watering £700-plus price tag.  

The pricing strategy saw Microsoft asking users to cough up £400 for the 32GB of the Surface RT or £479 for the 64GB version and – perhaps unsurprisingly - prompted calls for the vendor to slash the cost or face becoming another tablet market also ran.

Companies intent on deploying the devices were also forced to shun their incumbent B2B IT suppliers, as the Surface was only available to buy directly from Microsoft or from John Lewis and PC World.

This limited distribution strategy has been widely criticised by the firm’s tranche of reseller partners, who have helped the firm rake in billions of dollars in software sales over the years.

It was even cited by Microsoft CEO Steve Ballmer as one of the reasons why Surface sales had failed to set the world alight during its first few months on the market.

Sadly, the situation didn’t improve in the months that followed, with Microsoft having to stomach a $900 million write down on its unsold Surface RT inventory back in July.

To its credit, Microsoft has sought to address both these areas in recent weeks, by cutting the price of the Surface RT in the UK and the Surface Pro in other markets. It also set out plans last week to open up its Surface distribution channel to a wide array of B2B suppliers.

But that hasn’t stopped the firm coming under fire for the time it took to act on both these issues, given that the analyst community has been airing its misgivings about the firm’s Surface pricing and distribution strategy since its launch.

Question time

It’s unlikely that an answer to this will be forthcoming from the guys and gals at Redmond anytime soon, but I’ve got my own theories about the rationale behind Microsoft’s Surface strategy.

Many of these hinge on the fact that PC making isn’t something Microsoft has done before, having traditionally leant on its OEM partners such as Dell, HP, Lenovo to provide the hardware needed to run its Windows operating system and Office productivity suite on.

Perhaps Microsoft underestimated how much of a challenge going it alone in the tablet space would be. This might go some way to explaining why the release of the Surface RT and Pro was staggered across the globe, and why the firm has kept such a tight rein on its distribution.

During an interview with IT Pro back in July, Microsoft waxed lyrical about the Ultrabook-like pretentions of the Surface Pro, in response to a question about where it was coming from with the pricing for it.

And whilst Microsoft may have been tipping it as an Ultrabook challenger, all the public sees is a tablet and – thanks to the £700-plus asking price – a pretty expensive one at that.

As for the Surface RT, if we’ve learnt anything from the BlackBerry Playbook and HP TouchPad debacles of recent years, PC buyers are only prepared to pay top whack for one type of tablet and that seems to be the iPad.  

Microsoft has already heavily hinted that refreshed versions of the Surface RT and Pro are likely to be released next year, which might come as a surprise to some, given the grief it’s had with its first generation of devices.

Hopefully, by the time the next set of devices drop, the firm will have taken stock of the criticism its first foray into the tablet market has garnered and tweak its go-to-market strategy accordingly.

Especially as much of the groundwork for their launch will have already have been done, particularly where its distribution network is concerned.

If it can get the pricing of the devices to be a little more agreeable, Microsoft might finally have a true iPad challenger on its hands.