The Microsoft Surface Pro 2 tablet and Type Cover 2. Photo: Bloomberg
Microsoft has unveiled faster, more powerful versions of its Surface tablet in an effort to boost poor sales and mount a stronger challenge to Apple's iPad.
They needed to do something that was innovative beyond the first generation, and I don't see that in these devices.Jack Gold, technology analyst
The Surface is key to Microsoft's plan to reinvent itself as a devices and services company, but the revamp comes less than a year after it brought out its own computers for the first time and failed to put a dent in the market. It has racked up only $900 million in sales while generating a $1 billion charge for unsold inventory.
iPad challenger? Microsoft Surface 2. Photo: Getty Images/AFP
At an event in New York, Microsoft unveiled two new machines and a range of accessories promising faster processing, better battery life and more apps.
"We've definitely gotten a year smarter," said Brian Hall, general manager of sales and marketing for Surface.
The new Surface 2, which runs on a low-power ARM chip, starts at $529 for the 32 gigabyte (GB) version, not including a snap-on keyboard starting at $139.99. That is on par with Apple's latest Wi-Fi-only 32GB iPad, which costs $539.
Microsoft's Surface Pro 2. Photo: Reuters
The new Surface Pro 2, which runs on an Intel chip and is aimed more at the business and lightweight laptop markets, starts at $1019 for the 64 GB version, not including a keyboard. Apple's cheapest 128 GB MacBook Air costs $1099.
"We have to get people to think of it as a little different [from] an iPad," Hall said. "iPads are great, but these are a different device ... We're building a product for a different set of people."
Microsoft also said it now has 100,000 apps, 10 times what was available last year.
Microsoft's Surface Pro 2.
But initial reaction to the new devices was tepid.
"I don't see much incentive for people to buy these devices. Yes, they are cheaper than the iPads, but is that enough reason?" said Jack Gold, a technology analyst at J. Gold Associates. "It seems like Microsoft is just maintaining the traditional PC mantra – keep upgrading the chip and hardware a little bit every year at a slightly lower price. I think they needed to do something that was innovative beyond the first generation, and I don't see that in these devices."
As an added incentive, Microsoft is taking advantage of its other products, offering customers free Skype calling to landlines in more than 60 countries for one year and 200 GB of free storage for two years on SkyDrive, the company's online cloud storage product that competes with Google Drive, Apple's iCloud and Dropbox.
The Surface 2 comes preloaded with a stripped-down version of Office, including Outlook email. Surface Pro 2 can run the full, standard version of Office, but the software must be bought separately.
The hugely popular Office suite is the Surface's one unique selling point over Apple, as Microsoft has not released full, custom-designed Office apps for the iPad.
"What should be the 'killer app' is Microsoft Office," said Avi Greengart, an analyst at Current Analysis, who was more optimistic about the new Surface products. "The Surface Pro has a place as an ultra-portable notebook replacement. If you value the touchscreen form factor at that price point, it's a reasonable option."
Microsoft also introduced a range of thinner, backlit keyboards which double as covers, plus a new Power Cover which adds life to the battery, which will be available early next year. It also unveiled a docking station for the Intel-based Surfaces, so they can be hooked up to a desktop monitor, also available next year.
The new devices will be available for sale online and at Harvey Norman and JB Hi-Fi on October 22.
"This is about Microsoft making sure people understand Microsoft is here and will be part of the future of computing," said Gartner analyst Carolina Milanesi. "But I think the competition is still very tough."