iPad-Challenging Formula Still Eludes Microsoft

Microsoft has a steep hill to climb in terms of challenging the iPad’s tablet dominance with its Surface tablet PC products. Motley Fool’s Mark Morelli cites a Digital Trends estimate that that Surface has yet to crack the the top five let among tablet manufacturers, and sold fewer than 2 million Surfaces in Q4 of 2013 and generating revenue of $893 million.

Over that same period, Morelli observes, Apple sold 26 million iPads generating nearly $11.5 billion in revenue. Throw in Macbook sales, the laptop the Surface Pro 3 would compete against, and the balance tilts even more heavily Apple-ward.

Rumors of troubled times ahead for the iPad appear to be getting overblown, although personal computer tablets are inevitably transitioning to “mature” market status with sales growth falling off somewhat and shifting from adoption to replacement.

It seems clear that the Surface machines, while they have their merits, are still after nearly two years on the market not appealing to users to anything near the degree that would be required for them to take a serious run at toppling Apple’s top dog status either in tablets or premium laptop PCs. Manufacturers are gaining tablet market share ground on Apple are doing so largely on price, and doing likewise might be Microsoft’s only hope, although it will be tough to do that and sustain their Windows business model. Speaking of which, Windows 8 remains mostly unloved compared with Apple’s iOS and OS X, both of which Apple is giving Away free these days.

Some suggest that a big part of the Surface’s sales laggardliness is attributable to its ambiguous product identity. Is it a tablet or is it a PC? As the former, it’s bigger, heavier, and clunkier than the iPad, with no seven or eight inch companion model to appeal to fans of comfortable portability (and lower prices). As a laptop, an Apple MacBook is a more elegant, attractive, and less expensive alternative to the Surface Pro models, especially now that it’s available for $899. Not touchscreen? Hardly a serious shortcoming on a machine with a real keyboard and excellent trackpad.

Microsoft still hasn’t found the winning formula.