Microsoft tries again with Surface 2

Microsoft’s Surface 2 launch is a clear reminder that it's still playing catch-up to Apple. The new Surface tablets pack a lot of extra horsepower but winning new customers won't be easy.

Graph for Microsoft tries again with Surface 2

 Microsoft's Panos Panay works the crowd at the company's urface 2 and premium Surface Pro 2 invite-only launch in New York.

There was a strong Apple influence at the launch of Microsoft's next generation of Surface tablets—a reminder that that the company is still playing catch-up in a game created and controlled by the maker of the ubiquitous iPad.

Microsoft vice president Panos Panay unveiled the Surface 2 and premium Surface Pro 2 at an invite-only event in a chic New York gallery space, pacing around stage in a black shirt promising more power, more battery life and more fun. It was a slick keynote pulled right from Steve Jobs' playbook.

At first glance there's not a lot to be excited about. The new Surface devices look and weigh about the same as their predecessors, including same-size 10.6-inch screens and the trademark VaporMg casing with clip-on keyboard capabilities. Both models now have a dual-angle kick-stand. The cheaper one will come in silver. (Yawn.)

Beneath the Surface, however, Microsoft has made some significant changes.

The Surface 2, which succeeds the unpopular Surface RT model, offers a better screen, a faster processor and a 25 per cent increase in battery life—up to 10 hours, Microsoft says. It also runs an upgraded version of Windows RT, Microsoft's mobile operating system, which now includes Outlook on top of Excel, PowerPoint and Word. 

It will retail in Australia for $529, or $10 less than the cheapest version of the latest iPad.

The Surface Pro 2 is aimed at professionals who want the power of a traditional PC in a tablet-style device. It runs the full Windows 8.1 software suite and boasts a 75 per cent increase in battery life (following complaints the previous model only lasted around four hours), thanks to its new energy efficient Haswell processor.

The new models will come with 200GB of free online storage through SkyDrive for two years, plus free international calling and Wi-Fi hotspot access via Skype for 12 months. There will also be a colourful new range of peripheral devices, including a docking station and a battery-boosting cover with an inbuilt keyboard.

"The most impressive thing is that Microsoft addressed virtually every aspect of both products," says Ross Rubin, a tech analyst with Reticle Research. "Performance, service bundling, battery life—they left no stone unturned in terms of improving the products' proposition."

The most striking claim made at the launch is that the Surface Pro 2 is now faster than 90 per cent of laptops on the market. It's hefty $1,019 price-tag also puts it among full-function PCs.

Rubin says these stats highlight one fundamental case that Microsoft is yet to prove: "that one device can serve both needs—a tablet and a notebook." The iPad, designed as a portable companion to a computer, is built on precisely the opposite assumption.

Microsoft's also appears to have shunned the growing market for smaller, cheaper devices—despite rumours the company is developing a mini-screen option.

"The tablet market has essentially shifted to 7- and 8-inch form-factors, and we don't see one from Surface," says JP Gownder, vice president of Forrester Research. "That should have happened if they are serious about getting into true tablets. Instead, all the energy sticks with the Nexus 7 and iPad mini." 

"[The new Surface devices] are good products, nobody's saying that they aren't. But in the consumer market, they are going to be relatively expensive compared to what else is out there."

Gownder suggests Microsoft should focus on refining the form and usability of its Surface range, rather than obsess over speed and graphics. "Apple broke the paradigm," he says. "You can add all the horsepower you want, but it's the experience that matters."

To offer a true tablet experience, Microsoft will need what's considered to be tablet software: applications. The Windows Store now offers 100,000 apps for Surface users, a big increase from the 10,000 available when the range launched last year. But it's still a fraction of the 1 million or so programs that can be downloaded from Apple's App Store and Android's Google Play.

"That's what went wrong with the Surface RT—not enough apps," says Crawford Del Prete, executive vice president at World Research Products. "They started with beautiful hardware, but it didn't live up to the software availability. I think with more apps, there are customers who will be interested in [Surface]."

Del Prete says Microsoft should seize the opportunity to work with Windows users to develop new industry apps for its improved hardware, as Apple has done. "If you're an enterprise that wants have a device that's easier to manage with full fidelity on Office, Surface is a good option."

"Is this update the home-run that's going to make everyone switch? Probably not. But's it's a very big improvement."

The new tablets will be available on October 22 in 21 countries, including Australia. Pre-orders start tomorrow.

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