Surface: Microsoft’s Ticket Into Tablet Market?

On Tuesday June 18th, 2012 Microsoft unveiled its new tablet computer, Microsoft Surface. What does this mean to the tablet market as a whole and is Surface a Microsoft’s ticket into tablet market?

The tablet market took a big leap forward when Apple introduced the original iPad back in April 2000. Two and a half year later, the tablet market grew to $79 billion with top five manufacturers controlling more than 90% of the market and more than 107 million tablets are expected to ship within this year alone. The tablet trend is still strong with current tablet penetration rate at 31% and expected to grow to 47% in 2013.

Microsoft Surface tries to blend the line between tablet and PC by targeting customers that want a tablet that can do what ever their PC can. This particular segment of customer is likely to be working in the corporate realm where they have to stick with Microsoft products. This strategy might work in favor of Microsoft because other tablet manufacturers currently underrepresent these particular groups.

Even though Microsoft officially announced the Surface, some crucial details are still unclear:

• Pricing – Microsoft failed to announce the prices for both the Surface RT and the Surface Pro version. This is tricky for Microsoft because this is a really competitive market, and if they price too high, people will turn to iPad instead.
• Apps – The Surface Pro version runs the full version of Microsoft Office 2013. This is a strong selling point but will this be enough to compete with the 225,000 iPad apps available through Apple App Store?
• Who is the customer – Microsoft needs to identify who the main customer really is. Right now, the most obvious group is B2B. However, Netflix has suggested that Surface could benefit the home user as well. More importantly, Microsoft must decide whether Surface will become a PC replacement as it could potentially shrink its PC market share.

This will be a tough market for Microsoft to break into since majority of customers who want a tablet are mostly likely decided on a particular brand already, given that they have not bought one already. Also, Apple’s dominance in the tablet market means that Microsoft has to fight in a market where Apple hold the major stake. Nonetheless, Microsoft has successfully introduced Xbox 360 to the console gaming industry in direct competition with Sony’s PlayStation. With the right focus and marketing efforts, Microsoft Surface can successfully enter the tablet market and get a firm foothold within the industry. For now, we will have to wait until the official price is announced.