What Exactly Is Microsoft Surface and What Impact Will It Have on the Market?

No doubt you've already read a great deal about Microsoft's new hybrid tablet-PC, Surface. It's being described as Microsoft's challenge to the iPad. Some have already called it a "game-changer." But that remains to be seen. It's also probably more of a challenge to Microsoft's own hardware partners than to the iPad.

Surface is a "new family of PCs." There will be at least three versions of the computing device, sporting slightly different specs and features. The screens apparently will all be 10.6 inches. All will come with a version of Windows 8. Perhaps the most compelling feature of the device is a "smart cover" that also operates as a keyboard. 

Unfortunately at yesterday's press conference, which I was not present for, the company provided no release date or pricing information. The latter is critical. However Microsoft said that Surface devices would be competitively priced. In the case of Surface for Windows 8 Pro, the company said it would be priced “on par with Ultrabook-class PCs." Right now Ultrabooks run from about $700 to $1,000

If Microsoft hopes to compete with the iPad, the lesser Windows RT version will have to start at $499. 

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There are some who believe that Microsoft took the bull by the horns in creating Surface, frustrated that its partners were not building compelling hardware while the iPad increasingly stole PC sales. It may well be that this will be the "kick in the pants" that Dell, HP, Acer and the rest need to start developing sexier machines. 

However it's more likely that this device -- provided it works well and delivers against its promise -- will compete with those same hardware partners. It could well capture sales that might have gone to Ultrabooks. I would also imagine that enterprises will adopt these machines, it's not as clear that consumers will. That's where price comes in. 

Another factor is Windows 8 and the public response to the new OS and UI. Microsoft is no longer in the position it has enjoyed for the last 15 years: when it released an OS update people bought it (until Vista). Now Android tablets and iPads do provide a viable alternative for those not doing heavy duty Office-oriented PC content creation.

Windows 8 has so far received mixed to negative reviews. While its Windows Phone OS has been critically praised, the devices aren't selling. This is partly because the UI and OS are unfamiliar to smartphone owners who've already become accustomed to the look/operation of iOS and Android. There are also too many competing options. Android has taken Microsoft's place in the smartphone world; it has become the alternative-to-Apple software supplier.

If consumers find Windows 8 jarring they may delay buying or avoid it. That's why price is so important. Surface is a sexy little device that must be priced very aggressively to get consumer attention. Otherwise, Surface could go the way of the Zune or the even shorter-lived Kin.