Philosophical Dissonance Accounts For Microsoft’s Surface RT Failure – The ‘Book Mystique

When Microsoft somewhat belatedly rolled out its Surface tablet computers last year, I thought the Surface Pro concept made a lot of logical sense, at least theoretically. The consumer market targeting Surface RT with its dumbed-down Windows RT OS for ARM powered devices not so much.

While the Surface Pro is powered by an Intel Core i5 PC CPU and capable of running the full version of Windows 8 with a traditional desktop interface, file system access and supports the vast existing ecosystem of Windows software, an initial and perceived future shortcoming of the RT model was and is a paucity of application support. It is simply eclipsed by the hundreds of thousands of apps available for the iPad on the Apple App Store, and there seems very little likelihood of it ever catching up. The supposed ‘killer app’ advantage of being able to run a dumbed down version of MS Office in the Surface RT wasn’t nearly enough to compensate for the general app drought, especially since users for whom Office compatibility is of make-or-break importance are likely to gravitate toward the Surface Pro, which can run the full desktop version of Windows, anyway.

There are some good ideas form factor and feature wise incorporated in both Surface products, notably the availability of optional keyboard covers, the fold-out kickstand for keyboard cover or external keyboard use, and real standard USB I/O ports on both models.

And at least with the Surface Pro, the prospect of having full desktop PC functionality combined with tablet handiness and convenience seemed like having one’s cake and eating it too. In theory.

As Microsoft founder and former CEO Bill Gates noted in a 2012 PBS Charlie Rose interview: “You don’t have to make a compromise. You can have everything you like about a tablet and everything you like about a PC all in one device. And so that should change the way people look at things.”

And no less than Apple co-founder Steve Wozniak appeared to be pretty much in agreement with that assessment. Speaking at a press conference at the Entel Summit in Chile, Wozniak declared that the Surface is a “beautiful device” of the sort that a reincarnated Steve Jobs hired by Microsoft might’ve designed.

Except that in real world use, it turned out that you still did have to compromise, and that you couldn’t have full PC power and versatility and tablet convenience in one device, at least not in a Surface Pro, which has miserable battery life compared with an iPad, and runs hot, begging the question of why not just opt for an UltraBook if you want a Windows machine with a keyboard?

Another blunder Microsoft made was pricing the Surface pretty much at parity with the iPad, or even higher with the Pro models. They’ve since partly repented of that, reducing the price of the entry-level 10.6-inch 32 GB Surface RT from $499 to $349 — only 20 bucks more than Apple charges for its 16 GB WiFi iPad mini, or with a keyboard cover to $449, down from $599. However the stronger-selling (so to speak) Surface Pro remains priced closer to MacBook Air territory.

Speaking of memory, Microsoft included a nominal 32 GB of storage memory in its base Surface RT, compared with Apple’s 16 GB iPad at the same price point prior to the recent cuts. However, the sorry fact was that because of Windows bloatedness even in pared-down RT config., plus the porkiness of bundled app and utility software, the 32 GB Surface RT offered about the same usable storage volume as a 16 GB iPad

Even the recent Surface RT model price reduction came only after the icewater reality check of a reported 6 million unsold units gathering dust in warehouses, a $900,000 “inventory adjustment” writedown on Surface losses, and sales of approximately 1 million Surface units in 2012 based on Parks Associates estimates, representing a paltry 1 percent of the total tablet market, and accounting for only one-quarter of all Windows-powered tablet sales.

Still, Microsoft insists that it isn’t fixing to abandon the Surface RT the way it did its unsuccessful iPod challenger Zune a decade or so ago. Last week it launched a new tranche of iPad-bashing ads to go with the RT price reduction, but it’s still got a mighty steep mountain to climb even to get out of the red. And they might be well advised to be cautious about drawing comparisons with the iPad. As Appleinsider’s Daniel Eran Dilger noted in an editorial last Saturday, “There isn’t some mystery as to why Surface RT isn’t selling, even at loss leader pricing. It’s not a good product. And it competes against a really good product.”

So true. There are quite a few things I find frustrating and annoying about the iPad, mostly in trying to use it as a production platform, but I don’t think there’s ever been an Apple device that so comprehensively exemplified the old Apple “it just works” ad-copy slogan. There’s a great deal of pleasure associated with using and working with elegant, beautifully designed, and high quality Apple hardware. Microsoft hardware (eg: keyboards, mice, XBox) has a reputation for excellent material and build quality as well, but elegance not so much.

Parks Associates senior analyst Jennifer Kent, writing for eCommerceTimesnotes that nearly three years after Apple introduced its iPad, the company still enjoys the largest market share in tablet space. Ms. Kent acknowledges that Apple has lost significant market share over the past two years, but observes that even within the non-Apple portion of the tablet computer market, no single manufacturer has managed to carve out a majority stake, and even if Apple’s share were to dip beneath the 50 percent mark after the 2013 holiday season (it’s currently at about 55 percent), the market would still be best characterized as “Apple versus The Rest,” with Apple maintaining a plurality share. Moreover, she predicts that with new/updated iPad models anticipated for later in 2013, Apple will be waging a robust campaign to retain its majority market share.

Commenting on Microsoft’s Surface RT price cut and the price cut and recent management revamp, Microsoft expert Karl Volkman, Chief Technology Officer of SRV Network, Inc. in Chicago, Illinois, maintains that “Microsoft’s price cut of the Surface tablet is a pretty clear indication they are trying to increase their share of the tablet market. They are in direct competition with the iPad, and they need to gain some competitive advantage to keep up with Apple. Cutting the price was their best option and makes the Surface tablet more accessible to consumers trying to decide between the two products.”

“When Microsoft first introduced the Surface RT, consumers were still unsure of the Windows 8 platform and there were concerns over a lack of apps,” continues Volkman. “Now that they initiated the price cut, this will give Microsoft better competitive positioning in the market.”

However, ZNet’s Matt Baxter-Reynolds is not so sure about that, and says that while he doesn’t think the PC is dying in a literal sense. He likes the power and flexibility. However he contends that most people don’t like the complexity that comes with power and flexibility, and some just want to give their parents a box that lets them have a video call with the grandkids from time-to-time, and don’t want to have to futz around configuring anti-virus software.

Ergo: the reason why people buy smartphones and tablets isn’t because they are necessary better or more worthy than PCs, Baxter-Reynolds maintains. They buy them because they now have the option to. Five years ago they didn’t. So the issue for Microsoft he says is is whether the PC can be disconnected from the idea of Windows so Windows can survive as the PC wanes.

He further notes that Microsoft’s Surface RT was, by design, a good enough post-PC device implementation to compete with iPad and Android, but we know that Surface RT, and Windows RT, have failed in terms of sales numbers. However, more importantly, he observes, Surface RT also failed in terms of philosophy, taking the whole of the Windows 8 Project with it, operating on the contention that the real post-PC OSs – iOS and Android – were getting it wrong and what people were desperately wanting a “PC Plus” – despite there being little evidence that anyone but frustrated power users actually did.

What this means Baxter-Reynolds asserts,is that Microsoft does not have a product to compete with iPad or Android Jelly Bean tablets in the market at this point in time. That’s a market that wants a 7″-8″ device, with battery life measured in days, with absolutely zero complexity and no requirement of the user to undertake any cognitive loading at all, backed up by a rich ecosystem of apps, great support, and a polished user experience where they’re not always waiting for the “version 3.0 to be the good one”. But for Microsoft to make that happen, they’ll have to admit one thing: “Windows as a post-PC operating system is dead.”

The New York Times’ Nick Bilton is in essential agreement with Baxter-Reynolds, noting that when Microsoft CEO Steve Ballmer announced the Surface tablets last year, he emphasized features like additional ports, a microSD memory card slot, and stylus input support, and a built-in flip-up stand. Pens sold by Microsoft also work with the Surface RT.”

However, Bilton, like Baxter-Reynolds, contends that most tablet buyers don’t want any of that stuff because they’re impatient: “They want to tear their new shiny gadget from the box and immediately start using it. They don’t have time to think about SD cards or USB drives or pens or flip stands,” but the Surface RT doesn’t allow consumers to just start using their “new shiny gadget.”

I’m one of the world’s slowest in boxers, and I would love to have a bit of added complexity in my iPad in the form of some slots and ports. But I acknowledge that’s a minority view, and I can appreciate why so many people relish the iPad’s simplicity. It’s seductive. Apparently, Microsoft didn’t appreciate the essence of the iPad user experience, and indeed purposely sought to deviate from it with the Surface, whose market failure is thus primarily attributable to philosophical dissonance, not engineering failure.