After significantly overhauling Windows last year, we knew that Microsoft was committed to its new mobile strategy, even in the face of disappointing sales of its first generation of Surface tablet devices. What remained unclear, however, was whether the Redmond giant would venture into the crowded 7-inch tablet market, which now contains products from Apple, Amazon, Google, Samsung, and many others. According to a report late Wednesday from The Wall Street Journal, that’s exactly what Microsoft plans to do.
The software giant is developing a new lineup of its Surface tablets, including a 7-inch version expected to go into mass production later this year, said people familiar with the company’s plans.
According to the newspaper’s sources, Microsoft originally had no plans to expand its Surface line to the 7-inch space. But due to the explosion in popularity of smaller tablets, such as the Kindle Fire, Nexus 7, and iPad mini, Microsoft felt compelled to throw its hat into the arena in order to increase its chances of cementing Surface as a viable consumer option.
The maturing of the 7-inch tablet market has whetted consumer appetites for ultra-portable, highly capable, and, perhaps most importantly, less expensive options. With Microsoft’s first round of Surface devices entering the market at $499 (and x86-based Pro models starting at $899), the company’s current lineup can’t compete on price with the heavily marketed tablets from firms like Amazon ($159) and Apple ($329), even if the Surface sports more powerful hardware.
A cheaper 7-inch Surface model not only allows Microsoft to compete in the small tablet space, it also fits nicely with the company’s shift to lower cost subscription-based software. Microsoft last year introduced Office 365, a subscription model for its popular office productivity suite, and it has also announced plans to move to cheaper, more frequent updates for Windows starting with the release later this year of Windows Blue.
Microsoft’s dramatic shift to a “devices and services” company is off to a rough start. Despite significant improvements to the underlying code, the company’s Windows 8 operating system was met with generally negative reviews. On the device side of the equation, both Surface and Windows Phone devices have failed to meet sales expectations. A stronger effort for round two of Surface, along with needed updates to Windows, can hopefully turn the company’s fortunes around.