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Microsoft Surface Pro 3 Review

Shelly Palmer   |   July 14, 2014    4:47 PM ET

Microsoft Surface Pro 3

Will Microsoft's Surface Pro 3 replace your laptop? That's the million-dollar question. Microsoft says it absolutely can -- and it's right.

The Surface Pro 3 is Microsoft's newest tablet. The device has a bigger screen than its predecessors (12"), is more powerful and comes with better accessories. All in all, there are five models, ranging in storage (64 GB to 512 GB), power (Intel i3, i5 and i7 Processors) and price ($799 to $1,949).

If you really want to replace a laptop, you're looking at any of the four best models (which start at $999). At these levels, the insides of the Surface Pro 3 are essentially the same as what's inside a MacBook Air. For all practical purposes, the Surface Pro 3 is simply a laptop with a detachable keyboard.

For $129.95, the optional plastic keyboard has a touchpad that's pretty tactile and keys that actually click. This is a keyboard you can really touch-type on as opposed to the horrible plastic mess that Microsoft rolled out with the first generation Surface tablets.

Power Excel Users Rejoice

For Windows users, the Surface Pro 3 has only one important feature -- it will run 100 percent of your Windows programs. Specifically, it will run 100 percent pure Microsoft Office. Where does this matter? Anywhere you need keyboard shortcuts such as Excel power users. If you use extensive Excel keyboard shortcuts, you know that the version of Excel that runs on OS X is useless. If you own a MacBook Air and you run Windows over Parallels, you know that MacBook Air keyboard does not allow most power Excel keyboard shortcuts - Mac keyboards simply don't offer the key combinations. The same is true for the glass keyboards on iOS and Android devices. However, the Surface Pro 3 is a 100 percent Windows machine and when you run Excel you will be in keyboard shortcut, power user heaven.

Of course, the Surface Pro 3 also runs everything else you can run on a Wintel machine including the full Office Suite, Adobe Creative Suite and even Pro Tools (digital audio workstation) and Avid (digital video workstation) software. I loaded up my demo unit with all kinds of random Windows programs and they all ran perfectly.

Microsoft's Surface Pro 3 Hinge

Standout Features

Microsoft is quite excited about the hinge on the back of the Surface. When the product manager demonstrated the device to me, he spent about 10 minutes raving about the hinge - it's got a sort of "infinite flexibility." With it, you can turn the device upside down, you can stand it up... you can prop it just about any way you can think of... who could ask for more?

Microsoft's Surface Pro 3 Pen

One of the true hero features of the Surface Pro 3 is the "pen." It's far more than just a stylus. The pen has two buttons: an eraser and a selector. When you click the top of the pen, you immediately get into Microsoft OneNote -- even if the device is locked. The pen is particularly excellent and it transforms OneNote into something special. If OneNote is a tool you like to use, you are really going to love the way it's integrated into the Surface Pro 3.

Windows 8.1 -- Love It or Hate It?

Tablets require touchscreen interfaces. Laptops require keyboard interfaces. The Surface Pro 3 offers both. You may have heard that Windows 8 sucks. I've heard that too (and said it a few times). Windows 8.1 sucks less. Would I like if it could be set to default to a Windows 7ish home screen devoid of the seemingly useless tile icons? Perhaps. But after using it for a while, you will come to appreciate how much care and thought went into the new interface and, as soon as you start mixing keyboard, touchpad and touchscreen user interface behaviors, you're going to understand why there is no reason in the world to look backwards. Windows 8.1 may not be what you think you want in an operating system - but it's an important step towards a touch-sensitive future.

Who is the Surface Pro 3 For?

Students and professionals who really want to have the best of both worlds will really like the Surface Pro 3. If you like using a tablet for reading and Skype and browsing the Internet, but also need to really get work done, as Microsoft boasts, "This is the tablet that will replace your laptop."

The i5 models ($999 for 128 GB or $1,299 for 256 GB) are good devices. The all-singing, all-dancing i7 models ($1,549 for 256 GB or $1,949 for 512 GB) are great devices. The $799 model (an i3 with 128 GB of storage) isn't worth the money. The i5 models are available now, while the i3 and i7 models will start shipping on August 1.

If You Ask Me...

If I were buying one, I would only consider the i7 with 512 GB of storage for $1,949 because you will really need the storage and you can never have too much processing power. While $2,250 (including keyboard and tax) is really expensive, it is about as future-proof as you can make this purchase. Literally every other model will be obsolete the moment you get it home. 256 GB simply is not enough local storage for anyone. BTW: I would not purchase a MacBook Air with anything less than an i7 processor and 512 GB storage either. There's no point.

Final Thoughts

This is the tablet everyone wanted before Apple invented iPads. It's a "real" computer in a tablet form. It has a USB port, it has a stylus, it's powerful, it can run "real" software. The problem Microsoft is going to have is that iPads have been invented and consumers have voted with their checkbooks. Hundreds of millions of iPad users have been trained to use apps instead of software. They are happy with single-purpose, easy to use, colorful tools that do simple things. Do you really want a full version of Microsoft Office on your tablet? Are you going to like the full version of Adobe Illustrator on a 12" touchscreen? Will the plastic keyboard comfortably replace your laptop keyboard? I say yes. But it's not up to me... it's up to you.

Great Tech Gifts For Dads & Grads

Shelly Palmer   |   June 2, 2014   10:12 AM ET

Here's my short list of awesome gifts for dads and grads:

If you need a smartphone today... HTC One M8 (MSRP $199 w/ 2-Year Contract)

HTC One M8

Apple and Samsung have held the "best smartphone" crown for several years, but the best all-around phone on the market right now is the HTC One M8. It's got an aluminum body, which is a really nice feature. It has a beautiful 5" 1080p screen, great sound (two front facing speakers) and a brand new camera system (which takes outstanding pictures). It's also incredibly powerful and, because it's an HTC phone, will run the most current version of Android for two years. If I had to purchase a phone today, this would be my personal first choice.

If you can wait a week or two for awesomeness... The LG G3


LG's newest flagship phone, which it just unveiled this past week, is being called "the most advanced smartphone ever." It has a camera with laser focus and an even better screen than the HTC One M8. The only reason it's not the top pick for Dads and Grads is because there's no firm release date; LG has just said it will come out in the U.S. this summer. I will pre-order this phone and you should, too. It has a removable battery and, although the case is plastic, it feels great in your hand. LG has a clear winner - I just wish I knew exactly when it was going to be available.

Tablet lovers will loooovvvveee the Microsoft Surface Pro 3 (MSRP $799+)

Microsoft Surface Pro 3

True, the latest tablet from Microsoft isn't out yet, but it ships very soon (June 20). Why buy a Dad or grad a tablet OR a laptop when they can get both in one device? Microsoft has tried to sell its Surface tablet as a more complete PC than Apple's iPad, but the new Surface Pro 3 is going head-to-head with Apple's MacBook Air -- which many people (myself included) believe to be the best laptop on the market. That's a tall order for any device to tackle - especially one with a track record as shaky as the Surface tablet - but Surface Pro 3 may be up to the task. The Surface Pro 3 has a bigger screen (12") than its predecessors, is more powerful and comes with better accessories. You can use it as a tablet, but it also runs the full version of Windows 8.1. This means you can run any Windows 8.1 compatible software on it. Portable and powerful, the Surface Pro 3 is perfect for Windows people who want to ditch their iPads and enjoy a unified Windows experience.

For the Fashion Conscious... Apple iPhone 5S, iPad Air or MacBook Air

iPhone 5s

All of Apple's gadgets are impressive and they're all at or near the top of their product class. It is true that the iPhone 5S isn't as powerful as the HTC One M8 (it doesn't need to be), and the iPad Air and MacBook Air can be condensed into one gadget with something like the Surface Pro 3 (but iOS is an awesome ecosystem and there's no reason to switch out of it). You can also argue that Apple's products have gotten a little stale in recent years ("Is this the line for the apps?"). But, although it is in vogue to make pejorative comments about Apple, all three of these devices are amazing products - and anyone would be proud to own them. So if you think your dad or grad wants an Apple iPhone 5S or an iPad Air or a MacBook Air (who wouldn't?), go for it! As tech fashion accessories go, they are second to none!

For the health conscious... The Jawbone UP24 (MSRP $149)

Jawbone UP24

I've been using a Jawbone UP (now an UP24) for almost a year. During that time, I have lost over 55 lbs. by walking, eating a balanced healthy diet and getting enough sleep. I have quantified a good portion of this journey using the UP app (Visit to learn how). The UP app tracks steps per day, estimated calories burned (resting and active), sleep (deep and light) and calories consumed. The UP24 is the latest and greatest wristband from Jawbone. It's more accurate and more awesome than the original Jawbone UP. It's splash-resistant, light and fashionable. Its battery lasts for days, which is good - because you can wear it all the time. It's one of the best fitness trackers out there, and a great gift for anyone who wants to get into shape this summer.

For the Dad or Grad Who Has it All... Content Cards or Subscriptions

Digital Content Cards

If you're looking to buy a gift for someone who already has every gadget they'd need, you can give them the gift of customization: digital content cards to their favorite e-marketplaces. iTunes or Amazon gift cards offer endless possibilities - they work for anything either vendor sells (apps, movies, music and more). You can also buy subscriptions to services like Netflix or Spotify, which can be used to start a new subscription or extend a current account.

- - - - - - - - - -

That's my shortlist of great tech gifts for dads and grads. Why these particular phones, tablets and only one fitness tracking wristband? Because it's "my" shortlist. If you were going to buy me a present this June, I'd want one of these. Samsung Galaxy S5 or S4... yes, of course. But I love the HTC One M8 and I'm about to love the LG G3. Android Tablets or other iPads? Nope. Not right now. Kindle Paperwhite? Yes. But you have to want an e-reader. I love mine, especially at night. It's the best e-reader for under $100 and it's also a great gift. Fitbit Force? Recalled. I think that covers all the obvious stuff I left out. If you have questions, shoot me an email. I'm happy to help. Happy Fathers Day to dads everywhere and congratulations to the class of 2014!

Microsoft Wants You To Believe Its Tablet Isn't A Tablet

Timothy Stenovec   |   May 20, 2014    2:38 PM ET

Much of the focus with Microsoft's Surface, the software giant's family of tablets, has been on how it's fared against the iPad.

Spoiler alert: It hasn't done that well … at all.

On Tuesday, Microsoft made clear that it's shifted tactics. Now, the software giant is going after the Macbook. This won't be easy.

To a room full of tech reporters typing on MacBook Airs, Panos Panay, Microsoft's vice president in charge of Surface tablets, explained that the company's new Surface Pro 3 is a tablet that can also function as a laptop. The device's tagline is, after all, "The tablet that can replace your laptop."

"Tablets are designed for you to sit back and watch movies. They are designed to read books. They are made for browsing the web," Panay said. "Laptops are not designed that way at all. They are designed to help you get stuff done." The new Surface Pro 3, he said, is "everything in one package."

The base model Surface Pro 3 has a larger screen, and is thinner and weighs less than its predecessor. It starts at $799 and doesn't include a keyboard, which is available for $129. The top model comes in at a whopping $1,949 without accessories.

The 13-inch MacBook Air starts at $999. The computer is widely considered the best laptop out there.

In a display of showmanship, Panay highlighted the weight difference between a 13-inch MacBook Air (2.96 pounds) and a Surface Pro 3 without a keyboard (1.76 pounds) by placing them on a scale alongside one another.

The Surface Pro 3 has a 12-inch screen, and with the optional keyboard attached it comes in at 2.41 pounds. That's still lighter than a 13-inch MacBook Air, but heavier than an 11-inch Macbook Air.

Microsoft has not fared well in the tablet wars. The company was late to release its first tablet, which had a relatively high starting price and wasn't available in very many stores. Despite a refresh last fall, it's still had trouble making a dent in a category that has largely been dominated by Apple and Samsung. One analyst quoted in the Wall Street Journal estimated that Microsoft has taken as much as $2 billion in operating losses on the Surface.

Shipments of Surface tablets accounted for only 1.3 percent of all tablets shipped worldwide in the first three months of this year, according to data from IDC. Apple and Samsung together accounted for over 54 percent of tablets shipped last quarter.

Tablet growth has also begun to slow. Even Apple, the company that invented the category, is feeling the pinch, reporting less-than-stellar iPad sales last quarter.

Microsoft has taken the productivity laptop-meets-tablet tack with its previous Surface marketing. But now that the screen size is larger (12 inches over 10.7), and the device is lighter and comes with a much-improved stand that makes typing on it easier, it may have a better shot.

"This was a PC announcement, not a tablet announcement," said Ryan Reith, an analyst at market research firm IDC who covers tablets. "At the end of the day this can be used as a tablet, but it's a PC first."

The device's starting price places it at the high end of tablets in terms of cost, Reith noted.

"If you compare this to a tablet, you're going to say this is the most expensive tablet out there," he said. "If you compare it to other ultrabooks and the Macbook Air, it's going to win in a lot of categories, including price."

Microsoft spent much of Tuesday's event talking up the benefits for people whom Panay described as "mobile professionals" -- doctors, architects, screenwriters and others in creative fields.

Peter King, the director of tablet research at Strategy Analytics, said that although tablet growth is slowing, there's still opportunity to sell to large corporations and professionals.

"By introducing possibly a larger screened Surface fully integrated with Windows 8.1, with Office, they will be opening themselves to those legacy IT guys who are still pretty much controlling Windows empires within their organizations," King speculated before the announcement.

Growth in this category is delayed, King said, because unlike consumers who walk into a store and buy a tablet or PC, organizations can take up to a year and a half experimenting with devices and writing software before making a large-scale purchase.

"The sky isn't falling in the tablet market," King said. "It's not mature, it's not saturated by any stretch. We've got a lot of exploring to do to find where the best fit for a tablet is within organizations and even within the home."

Timothy Stenovec   |   January 24, 2014    8:18 AM ET

It sounds impressive: Microsoft in its latest quarter doubled sales of Surface -- the tablet it hoped would compete with the iPad -- and brought in twice as much revenue from the product as it did in the previous three-month period.

But the Redmond, Wash.-based company still managed to lose millions on its tablets.

In its earnings report on Thursday, Microsoft said it sold $893 million worth of Surface tablets in the three months that ended Dec. 31, up from $400 million in the previous quarter. That was more than the $853 million in Surface sales for Microsoft's entire fiscal 2013, which ended in June. But the company's "cost of revenue" -- what it cost to sell the tablets -- was a whopping $932 million in the latest period.

Microsoft just couldn't spark sales of the original Surface RT, the supposed "iPad Killer," after it launched in 2012. The software giant was way too late to the tablet game, Surface wasn't available at many stores, and with a starting price of $500, the product failed to gain traction. The company reported a $900 million charge last summer to reflect a $150 price cut on unsold Surface inventory, and has since slashed the price even more to make room for the second generation of Surface, which went on sale last fall.

(Microsoft seemed to learn from its Surface RT mistake and didn't ship enough of its second-generation Surface devices to keep stores stocked during the holiday shopping season.)

Over the past few months, Microsoft has been selling what was once a $500 tablet for as little as little as $199, less than the cost of its parts.

A "considerable amount" of Microsoft's Surface sales in its latest quarter could have been driven by the discontinued, heavily discounted tablets, Tim Coulling, a senior analyst at Canalys, a technology market research firm, said after Microsoft's earnings call with analysts and investors. "A significant portion of what was sold was sold at a loss."

Consumers seemed to respond to the price cut, at least: According to InfoScout, an analytics company, the Surface RT priced at $199 was the top-selling product at Best Buy on Black Friday. The Surface, as it's now called, is still being sold in Microsoft's online store with a starting price of $299. Microsoft didn't break down sales by Surface type, but in prepared remarks, Amy Hood, Microsoft's CFO, said the company "saw improved sales of Surface RT" in the latest quarter.

But Coulling said that selling older products at a loss is "unsustainable." He warned of dark days ahead, after Microsoft blows through its inventory of Surface tablets and consumers are forced to pay more for the Surface 2 and Surface Pro 2, which start at $449 and $899, respectively. (A Microsoft spokeswoman did not comment on whether the Surface RT is still being manufactured.)

It's a huge challenge, given that you can pick up a large-screened iPad for $399 and a handful of Android tablets for even less, Coulling said.

"Until they can reduce that price, they're always going to struggle against iPad and against the cheaper Android products," Coulling said. "They need to find a way of making their own Surface products cheaper, and also at the same time making Windows tablets that their partners sell … cheaper."

Even with the Surface sales surge, Microsoft has a long way to go. According to IDC, the technology research firm, Apple shipped 29.7 percent of all tablets worldwide in the third quarter of 2013, while Samsung shipped 19.7 percent. Microsoft shipped 0.7 percent.

Toward the end of the earnings call, one analyst remarked that Surface is still losing money, and asked Microsoft's Hood how many of the tablets the company would need to sell "to make some money."

"We've learned a lot over the course of this journey," Hood said, "and we have to make more meaningful progress … I think we've made a big leap from [version one] to [version two], and I look forward to making leaps as we go forward in our product road map. But I do think it's more to think about it as a goal we absolutely have as we continue to innovate the line."

Microsoft posted strong results for the quarter, exceeding analysts' expectations. The stock rose 3.5 percent in extended trading Thursday after the earnings report.

Timothy Stenovec   |   December 18, 2013    7:58 AM ET

The shocking news arrived this weekend: The Surface 2 and Surface Pro 2, Microsoft's second-generation "iPad killer" tablets, sold out in many stores.

Microsoft's been trying for years to catch up to Apple in certain areas, releasing the now-discontinued Zune to challenge the iPod and designing its own operating system for smartphones. The company's first attempt at building its own tablet was a disaster: Relatively few people bought the Surface RT, the base model, which started at $499, and Microsoft wound up having to take a $900 million charge at the end of its last fiscal year for unsold inventory and a $150 price drop.

Yet, according to a report from Mashable on Sunday, the second iteration of Microsoft's tablet, the Surface 2 and Surface Pro 2, was sold out at Best Buy stores in several states, on and on Microsoft's website.

What's going on?

Microsoft isn't saying much besides that it's excited to see the consumer response and is working to keep up with demand. We reached out to analysts and a Surface 2 owner for our answer.

Bottom line: Apple has little to worry about. Microsoft just seems to have figured out that it shouldn't make so many devices, lest it risk another embarrassing write-down. And, apparently, the Surface 2 isn't as bad as the first version, according to one Surface 2 user who got in touch with us.

Michael Cherry, the lead analyst of operating systems at Directions on Microsoft, an independent advisory firm in Washington that tracks the company, speculated that Microsoft "produced a smaller run with the intent of selling out."

"They really made what they thought they could sell," he said. "Good for them -- they were right."

The Surface 2 and Surface Pro 2, which went on sale this fall and start at $449 and $899, respectively, are Microsoft's latest attempt to win share of the lucrative tablet market, which the company entered disastrously late. The original Surface models, first sold in 2012 and early 2013, didn't do particularly well with consumers.

Microsoft sold $853 million worth of Surfaces during its most recent fiscal year. By comparison, "Apple’s iPad sales during roughly the same time frame were $33.2 billion," The New York Times' Nick Wingfield pointed out in September.

Sales of Surface tablets jumped to reach $400 million in the quarter that ended Sept. 30, and Microsoft sold more than twice as many Surfaces that quarter as the previous quarter, the Wall Street Journal reported. But the doubling was likely due to heavy discounts on the Surface RT, the Journal noted.

A cursory look at Best Buy's website on Tuesday morning showed 32- and 64-gigabyte configurations of the Surface 2 "unavailable" for in-store pickup in stores around New York City, Philadelphia and Los Angeles, though at least one configuration of the Surface Pro 2 appeared to be in stock at some of those same stores.

A Best Buy spokesman told HuffPost that the company receives new shipments all the time, and just because the device is shown as unavailable online doesn't necessarily mean it's out of stock in the store.

"Last year this quarter they shipped way too many [tablets] so they learned their lesson," said Jitesh Ubrani, a research analyst for IDC's Worldwide Tablet Tracker. "This quarter they've reduced the shipments."

All configurations of Microsoft's latest tablet, save for the 128-gigabyte Surface Pro 2, were listed as "out of stock" on Microsoft's website Tuesday morning.

"The public response to Surface has been exciting to see," Ben Reed, senior manager of Surface, wrote in an email to HuffPost. "It is our primary goal to get Surface 2, Surface Pro 2 and new Surface accessories into the hands of all people who want the most productive tablets on the planet. We’re actively working with our manufacturing teams and retail partners to get Surface in their hands as soon as possible."

The new tablets received a positive review from The New York Times, and Microsoft is spending a significant amount of money on marketing them.

Chris Jones, vice president and principal analyst at Canalys, an independent analysis firm, wrote in an email that marketing efforts by Microsoft and Intel, as well as an increased retail presence, "will help Microsoft and its partners build some momentum."

"However," he wrote, "against Apple and a raft of low-cost Android tablets, it is still going to be a long road for Microsoft in tablets.”

Apple's share of tablets shipped worldwide last quarter was 29.7 percent, while Samsung's was 19.7 percent, according to IDC. Microsoft accounted for only .7 percent of tablets shipped worldwide. Microsoft declined to provide sales figures to The Huffington Post.

The Surface is marketed as a tablet/computer hybrid that can serve both the needs of work and play -- that is, it can be used as a laptop but also as a tablet to stream movies and play games. PC sales have declined as an increasing number of people have turned to mobile devices, and Microsoft is hoping the Surface will partly fill that void and attract those who want the functionality of both a tablet and a laptop.

Gerald Tucay, a 38-year-old accountant who lives in Santa Barbara, Calif., traded in his Surface, which he said was "sluggish" and would "crash frequently" and drop its Wi-Fi signal. He got a Surface 2, and has so far been "very happy" with it, he said.

"What I like about the Surface is the portability and [Microsoft] Office," he wrote to HuffPost in an email. "I don't see it as a replacement of my desktop/laptop but an extension of it."

"The Surface 2 doesn't crash any apps even when I have 5-6 apps open, [and] Wi-Fi dropped only a few times," he added, noting that battery life is "slightly longer."

"But overall, [it's] much faster than the first one and the display is great. Minor hardware upgrades, but [that] makes a big difference."

The Lenovo Yoga Tablet

  |   October 31, 2013   12:06 PM ET

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A Tablet For The Holidays? Maybe

Shelly Palmer   |   October 28, 2013   10:42 AM ET

If you were hoping to purchase a new tablet this holiday season, you're in luck. Between Microsoft's recent launch of the Surface 2, Nokia unveiling what seemed like 100 new devices at Nokia World and then Apple's unveiling of the iPad Air and iPad mini with Retina display - there are several to choose from. Which should you buy?

Iteration From Apple

Apple's in a bit of a pickle right now, and it knows it. It used to enjoy close to 100 percent market share because Apple invented the category. Now, it has about 49 percent market share and the numbers are trending in the wrong direction.

The company knew it had to make a big splash to regain some momentum. It showed off two new devices: the iPad Air, which is thinner, happier, better, yummy yummy; and a new Retina display version of the iPad mini, which at 7 inches is a great form factor. They're good. But it's not really true innovation. (That's not to say Apple can't do true innovation anymore; the newly re-designed Mac Pro that was shown off just before the new iPads is stunning.)

But when Apple unveiled its new iPads, CEO Tim Cook said, "Our competitors don't really know what they're doing." He said that his competitors are making tablets, they're making notebooks, they're making Chromebooks. Cook said that Apple's clear focus and singular vision is better. I disagree. Truthfully, Apple is just making iPads. They're making them great. If you like an iPad, nothing else will do. But, if you want a combination of a PC and a tablet, Microsoft is really working hard.

So... What's Going on Between Nokia and Microsoft?

It makes no sense for Nokia to unveil a brand new tablet, powered by Windows RT, on the same day that Microsoft launched its new Surface 2 tablets. Nokia's about to be bought by Microsoft, yet for some reason still thought it was a good idea to unveil what's basically the same unit as the new Surface 2 (the new version of the tablet known as the Surface RT). Both of these devices are crippled because they're both RT units. The Lumia 2520 and the Microsoft Surface 2 are literally both the same unit from a technology standpoint.

The standout tablet from either company is the Surface Pro 2, which is a whole other thing because it's expensive. It's basically a laptop that's sold without the keyboard... which you will purchase separately making it even more expensive. The Surface Pro 2 with a keyboard is far more expensive than an iPad Air and more than double the price of the new iPad mini. Nothing to compare here. The Surface Pro 2 competes with Windows Ultrabooks, not Apple iPads.

Remember: It's Not Microsoft vs. Apple

The Surface Pro 2 is getting great reviews ... but there's no one lining up to buy them. The battle is not between Microsoft and Apple. The battle is between Google and Apple and, specifically, between Android devices and iOS devices. Microsoft hopes, wishes and prays to be included in the conversation, but it's not there. Microsoft is trying to create a market for tablet computing as opposed to tapping the market of tablet users - it may sound like a semantic argument, I assure you it is not.

Look at Microsoft's operating systems. You have Windows 8 on a PC vs. Windows 8 on a tablet vs. Windows RT ... these are operating systems that people will like when they learn to use them, but Microsoft has done nothing to teach them to use them. When you walk up to Windows 8, you go, "I want it to be Windows 7!" Microsoft has missed all kinds of consumer opportunities. What they have to do is figure out how they're going to beat Apple and Google at the game Apple and Google are actually playing - a game Microsoft clearly does not understand.

Who Won Triple Tablet Tuesday?

Apple. It said, "We're going to be here for Christmas, and you're going to be happy!"

Who lost? Microsoft. It's about to go and spend a big chunk of money for Nokia, and Nokia's sitting there going, "We don't know what we're doing..." and Microsoft is saying the same thing. Microsoft's got some work to do. There's a chance for Microsoft to make great strides in the tablet market, but looking at these holiday offerings, it's hard to be optimistic.

By BREE FOWLER   |   October 21, 2013    9:57 AM ET

NEW YORK (AP) — Whether or not you like Microsoft's updated Surface tablets will depend on your needs.

On one hand, the tablets can be great for working on the go, especially if you spring for a $130 keyboard cover. On the flip side, the new versions still lack the elegance and fun that iPads are known for and many Android-based tablets now offer. People used to the hundreds of thousands of apps on those devices will be disappointed.

Both new tablets go on sale Tuesday. The Surface 2 starts at $449 and runs a lightweight version of Windows 8.1 called RT, meaning it works only with apps designed specifically for it. The Surface Pro 2 starts at $899 and runs a full version of Windows 8.1, so it also works with programs designed for traditional desktops and laptops, including Photoshop and Quicken personal-finance software. Microsoft also will continue to sell last year's Surface RT model for $349.


Microsoft takes a lot of pride in the new devices' redesigned kickstand. Previous models felt wobbly, while the new ones have a steady leg to stand on. The inclusion of a second kickstand position makes typing on your lap as comfortable as typing at your desk.

Like other RT tablets, the Surface 2 comes with a free version of Microsoft's Office, giving you access to Word, Excel, PowerPoint and Outlook. The Surface Pro 2 has a more powerful processor and is designed for heavy work or gaming use, but you need to pay for Office separately or have a $100-a-year subscription. But at least you can get it. Microsoft doesn't make Office for the iPad or Android tablets.

Another feature that distinguishes the new Surfaces and other Windows tablets is their ability to run multiple programs side by side. Want to pull up a Microsoft Word document alongside a work email so you can reference it? No problem. Samsung devices do offer a similar feature, but it doesn't work with all apps. You're out of luck entirely with the iPad.

With the Surface Pro 2, Microsoft isn't just aiming to replace your tablet. It wants you to dump your laptop, too. To help with this, it will start selling a docking station early next year. The $200 accessory offers additional USB ports, which can connect to external monitors, printers and more. It's similar to docking stations available for many laptops and could help make the transition from the field to the office more seamless. Even without the docking station, there's one USB port, something rare in a tablet.

The use of Microsoft's SkyDrive online storage service also helps. You can access your files from just about anywhere with an Internet connection. It also could come in handy if your tablet happens to be run over by a truck, as you can download everything back. Both new Surfaces come with 200 gigabytes on SkyDrive for two years, on top of the usual 7 gigabytes.


While the Surface 2 and Surface Pro 2 may excel in productivity, they don't have the style and fun of their competitors. The construction is rugged, which makes me less paranoid about letting my preschooler play with it. But they also seem bulkier and heavier than other tablets. Surprisingly, the Surface 2 weighs just a pound and half, the same as the year-old iPad, while the Surface Pro 2 is about a half pound heavier. See if Apple will announce lighter iPads Tuesday.

And while Microsoft Office might be great for someone who wants to write a dissertation or create a PowerPoint presentation on a train, the dueling touch screen and desktop functions of Windows 8.1 might seem maddening to people who just want to play "Angry Birds," watch a movie or surf the Internet in bed. In addition, Microsoft's app store doesn't have as much to offer yet as its Apple and Android counterparts. Facebook, Netflix and ESPN are there, but not the multitude of games and other apps that Apple and Android users take for granted.

On the upside, the new Surface models let you play Xbox games. In addition, the Pro 2 was designed with not just business people, but also gamers, in mind. The Pro 2 features speed and battery improvements over the previous versions. That extended battery life should come in hand for movies, too. Microsoft won't say how long the Surface Pro 2's battery lasts, but says it's a 75 percent improvement over the previous version. The Surface 2's battery offers 10 hours of video playback, which is more than enough power to let you binge-watch the entire seven-episode first season of "Breaking Bad."

When it comes to watching TV, both Surfaces have high-definition displays, measuring 10.6 inches diagonally. That's larger than the iPad's 9.7 inches, but smaller than the typical laptop. The Surface screens also aren't as sharp as that on the iPad. Both Surfaces offer 208 pixels per inch compared with the iPad's 264.


Do you long for an almost laptop-like typing experience and access to Microsoft Office? Or would you rather use a simple platform that opens the door to hundreds of thousands of apps all viewed on a crystal-clear screen?

While the Surface 2 is probably most fairly compared to an iPad or high-end Android tablet, the Surface Pro 2's processing power makes it more like a laptop.

The optional Type Cover 2 — which comes in four colors — is essential if you want to get the most out of either new Surface. Anyone who has tried to type on a tablet's touch screen can attest that you need a proper keyboard if you're writing more than a few sentences. Spend the $130 for the Type Cover 2, as the $120 Touch Cover 2 doesn't have keys that move, making typing awkward. That brings the tablets' prices to $579 for the Surface 2 and $1,029 for the Pro 2.

By contrast, an 11-inch MacBook Air starts at $999 and weighs just 2.4 pounds. If you need Windows, there are plenty of ultrabooks available for a few hundred dollars more. Those are slim and light, just like the Surface.

I'm curious to see if the Surface 2 will be able to do the same work that my old, much heavier, laptop computer did when it comes to reporting from the field. Its paired-down nature probably won't let me run a lot of the same programs that I did on my laptop. I'm not sure if I'd be willing to pay more than $1,000 for the Surface 2 Pro with the keyboard cover, even if it does let me run those programs. I think I'd have to shop around and take a good look at some MacBooks and ultrabooks, too.

Meanwhile, when it comes to watching Netflix and wasting time on silly games, I'm not ready to give up my iPad just yet.


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By JOSHUA FREED   |   September 30, 2013    5:35 PM ET

MINNEAPOLIS (AP) — Delta Air Lines plans to buy 11,000 Microsoft Surface 2 tablets for its pilots to replace the heavy bundles of books and maps they haul around now.

Other airlines, including American and United, have been buying Apple's iPad for that purpose.

Delta says the Surface tablets will save it $13 million per year in fuel and other costs. Right now, each pilot carries a 38-pound flight bag with manuals and maps.

Delta plans to test the tablets on its Boeing 757s and 767s, which are flown by the same group of pilots. The airline is hoping for Federal Aviation Administration approval next year to use the tablets throughout a flight, and it hopes to be using the devices on all of its other planes by the end of next year.

One reason Delta picked a Microsoft device was that it's easier to give pilots separate sections for company and personal use, said Steve Dickson, Delta's senior vice president for flight operations.

Pilots will be able to install personal software and keep their own items such as photos on the personal section of the devices, while another portion will be dedicated to Delta's software, Dickson said.

"We trust them to manage that side of the device," Dickson said.

Another reason for picking the Surface tablet is that Delta's training software also runs on the same Windows operating system as the tablets, reducing the need to redo that software for another device, Dickson said.

Delta has already done a test program where pilots could bring their own devices, including iPads.

In August, Delta said its flight attendants will get Windows phones to process in-flight sales of food, better seats, and other items.

Microsoft announced last week that it is updating its tablet line, which includes the Surface 2s that Delta is buying. The Surface 2 is the cheaper of the two versions sold by Microsoft, retailing for $449 each. Dickson declined to say how much Delta is paying.

By ANICK JESDANUN   |   September 23, 2013    1:19 PM ET

NEW YORK (AP) — Microsoft refreshed its Surface tablet computers Monday, giving them longer battery life and better comfort on laps as the software giant continues its transformation into a devices and services company.

The company said it tried to address many shortcomings of the first-generation Surface models, sales of which have been slow. Microsoft needs to boost its tablet business to make up for sales declines in traditional desktop and laptop computers. IDC is forecasting a nearly 10 percent decline in PC shipments this year. The research firm also said tablets will outsell traditional PCs in the last three months of the year.

The new tablet models come with a better built-in kickstand so they can rest more firmly on users' laps while they sit on the couch. Microsoft is also making a docking station and a wireless mouse for business customers who need the mobility of tablets but also desire the traditional ways of using computers while in the office.

"We've definitely gotten a year smarter," Brian Hall, general manager of sales and marketing for Surface, said in an interview.

The redesigned Surface tablets come at a time of transition for Microsoft. Earlier this month, Microsoft struck a deal to acquire Nokia's phone and services business for $7.2 billion. The company is also searching for a new CEO to replace Steven A. Ballmer, who announced last month that he plans to retire within the next year.

The Surface Pro 2 is targeted at professionals who want the full power of a laptop in a tablet-style device. With a starting price of $899, the Pro 2 uses a full version of the upcoming Windows 8.1, meaning it can run any program written for Windows desktops and laptops.

The Pro 2 promises 75 percent more battery life than the debut Pro model, which came out in February. Microsoft, which did not specify the number of hours of expected use, said the improvement comes partly from the use of Intel's Haswell chip, which uses less energy. There's also an optional Power Cover accessory that extends battery life even further.

A cheaper model, Surface 2, offers a 25 percent improvement in battery life, which means it can get up to 10 hours of use. It also has a better screen compared with last October's Surface RT. It uses Windows RT 8.1, meaning it can run only apps specifically designed for it. Microsoft said it now has 100,000 apps, or 10 times what was available last year. Like other RT tablets, Microsoft is including a version of its Office software for free with the Surface 2. But now, the package will have the Outlook email and calendar program, not just Word, Excel and PowerPoint.

Microsoft is selling the Surface 2 starting at $449 and will continue to offer last year's Surface RT for $349.

The Surface 2 and the Surface Pro 2 will come with 200 gigabytes of free online storage through SkyDrive for two years, as well as free calls and Wi-Fi hotspots through Skype for a year. The new tablets will go on sale Oct. 22, a few days after Microsoft releases its 8.1 update to its Windows 8 operating system on Oct. 17. The screen on both new models remains at 10.6 inches, measured diagonally.

Keyboard covers will cost extra: $120 for a Touch Cover 2, which has working, printed keyboard on the inside surface but whose keys don't move when pushed, and $130 for Type Cover 2, which have keys that move. A new Power Cover with a built-in spare battery will cost about $200 when it comes out early next year.

A $200 docking station also will come out early next year and will work only with Pro models, including the older one already out. Hall said Microsoft chose not to make the Pro 2 smaller so that accessories would be compatible.

In an interview, Hall said the company will fine-tune its marketing strategy by showing specific things that the Surface can do in ads. Last year's ads, he said, tried to create an energetic feeling, but failed to show consumers what the tablets did.

Hall also said Microsoft won't try to compete directly with Apple's popular iPad. Microsoft is positioning the Surface as ideal for tasks people normally tackle on laptops, such as creating documents and editing movies. That's also the reason the Redmond, Wash., company opted not to make models with smaller screens, Hall said, as those tend to be used more for entertainment and content consumption.

"We have to get people to think of it as a little different (from) an iPad," he said. "iPads are great, but these are a different device. ... We're building a product for a different set of people."

  |   September 23, 2013   11:05 AM ET

NEW YORK — Microsoft introduced new Surface tablets, including a professional model that allows people to use it more like a laptop or a desktop computer.

The Redmond, Wash. company is trying to boost its tablet business as sales of traditional desktop and laptop computers decline.

The Surface Pro 2, unveiled at an event in New York, is targeted at professionals who want the full power of a laptop in a tablet-style device. The kickstand built into the device is redesigned to make it easier to use on laps. In the past, it worked best on a flat surface such as a table.

Microsoft says the Pro 2 also offers a 75 percent improvement in battery life over the previous model. There's also a new cover accessory that extends battery life even further. An optional docking station allows the Pro 2 to be used like a laptop.

A cheaper model, Surface 2, offers a better screen and other improvements over last year's Surface RT.

The Surface 2 starts at $449, and the Surface Pro 2 at $899. It is available starting on Oct. 22 in the U.S. and other markets.

Microsoft plans to release an update to its Windows 8 operating system on Oct. 17. Among other things, Windows 8.1 will be usable on smaller touch screens, which have become popular because they are cheaper and easier to carry. The previous version of Windows 8 was limited to tablets with 10-inch to 12-inch screens.

The screen on both new Surface models remains at 10.6 inches, measured diagonally. Microsoft didn't announce smaller Surface models.

The redesigned Surface tablets come at a time of transition for Microsoft. At a time when personal computer sales are falling, the software giant is trying to become a more diversified software and mobile devices company. Earlier this month, Microsoft struck a deal to acquire Nokia's handset and services business for $7.2 billion. The company is also searching for a new CEO to replace Steven A. Ballmer, who announced last month that he plans to retire within the next year.

Microsoft has manufactured devices before, such as its Xbox gaming console. In selling the Surface, the company became a competitor to its many manufacturing partners, which rely on its Windows operating system to power their machines.

Microsoft began selling Surface tablets last October, but sales have been slow. The company shipped about a million tablets in the first three months of 2013, according to research firm IDC. That includes about 260,000 of the slimmed-down RT version of Surface and 750,000 of the Pro version, which is compatible with older Windows programs. The shipments gave Microsoft a meager 2 percent share of the tablet market in the first quarter. By the second quarter, Microsoft tablets dropped out of IDC's Top 5.

Microsoft absorbed a $900 million charge in the April-June period to account for its expected losses from the Surface RT after it slashed prices to stimulate demand. The $150 cut brought the price of the Surface RT with 32 gigabytes of memory to $349. The Surface has a 10.1-inch screen measured diagonally. The RT version is 1.5 pounds. The Pro version is 2 pounds and starts at $799, $100 less than it was at launch.

Bill Rigby   |   August 26, 2013    9:04 AM ET

(Reuters) - The next CEO of Microsoft Corp has one big decision to make: press on with retiring chief executive Steve Ballmer's ambitious plan to transform the software giant into a broad-based devices and services company, or jettison that idea and rally resources around its proven strength in business software.

Ballmer's grand design - unveiled just six weeks before Friday's surprise announcement that he would retire within a year - calls for 'One Microsoft' to pull together and forge a future based on hardware and cloud-based services.

But poor sales of the new Surface tablet, on top of Microsoft's years-long failure to make money out of online search or smartphones, have cast doubt on that approach.

For years, investors have called on Microsoft to redirect cash spent on money-losing or peripheral projects to shareholders, while limiting its focus to the vastly profitable Windows, Office and server franchises.

Activist investor ValueAct Capital Management LP, whose recent lobbying of the company may have played a role in Ballmer's decision to retire earlier than he planned, is thought to favor such an approach.

In the last two years alone, Microsoft has lost almost $3 billion on its Bing search engine and other Internet projects, not counting a $6 billion write-off for its failed purchase of online advertising agency aQuantive. It took a $900 million charge for its poor-selling Surface tablet last quarter.

For now at least, Microsoft seems intent on pursuing Ballmer's vision. John Thompson, Microsoft's lead independent director who is also heading the committee to appoint a new CEO, said on Friday the board is "committed" to Ballmer's transformation plan.

The eventual choice of that committee - which has given itself a year to do its work - should provide a clue to how committed the board really is, and how open to outside advice.

"Taking an internal candidate like Satya Nadella - the guy nurturing servers - or some of the other people on the Windows team, that makes sense to keep a steady hand through this reorganization and strategic shift," said Norman Young, an analyst at Morningstar.

"But a strong case could be made that the company needs a breath of fresh air, someone who can execute on the strategy but also bring an outsider perspective," he added.

That could mean selling the Xbox and abandoning Bing, or cutting short efforts to make tablets or other computers.


Throughout the last decade, as Microsoft's share price has remained flat, shareholders have called for bigger dividends and share buybacks to beef up their returns.

Microsoft obliged with a one-time $3 a share special dividend in 2004 and has trebled its quarterly dividend to 23 cents since then.

But shareholders still want a bigger slice of Microsoft's $77 billion cash hoard, $70 billion of which is held overseas.

Rick Sherlund, an analyst at Nomura, believes that if the retirement of Ballmer means the company is listening to ValueAct and its supporters, then action on the dividend and share buyback could perhaps happen as early as September 19, when Microsoft hosts its annual get-together with analysts and is expected announce its latest dividend.

"The momentum of shareholder activism is well underway and likely to benefit shareholders even though the process of how this unfolds is not certain," said Sherlund.

The lackluster performance of Microsoft's stock has long been the stick that shareholders beat Ballmer with, and it has looked all the worse compared with the staggering gains made by Apple Inc under Steve Jobs.

Yet Ballmer - who owns just under 4 percent of the company - never showed any doubts about his intention to stay in the job. His old friend and ally Bill Gates, who still owns 4.8 percent of the company, never wavered in his public support.

The first public signs of dissent on Microsoft's board came in 2010, when Ballmer's bonus was trimmed explicitly for the flop of the infamous Kin 'social' phone and a failure to match Apple's iPad, according to regulatory filings.

It was around that time, though not necessarily connected, that the board started considering how it would manage a succession, according to a source familiar with the matter. Ballmer and the board began talking to both internal and external candidates.

About 18 months to two years ago, Ballmer started thinking seriously about a succession plan, the internal source said.

The time since was not marked with glory for Ballmer, with a tepid launch of Windows 8, the disappointment of the Surface tablet, and a $731 million fine by European regulators for forgetting to offer a choice of browsers to Windows users.

Two to three months ago, Ballmer started thinking seriously about his retirement and concluded it was the "right time to start the process," the source said. That was shortly after ValueAct took a $2 billion stake in Microsoft.

July's gloomy earnings, which offered no immediate hope of quick improvement, may have sealed the decision. Ballmer said Friday he made the choice in the few days prior, and informed the board on Wednesday. Whether the board urged Ballmer to leave is not known.

The impending exit of Ballmer leaves a difficult and perhaps impossible choice to his successor - pushing a large and insular behemoth through a highly risky transformation to the mobile world, or clinging to an island of profitable but PC-centric businesses.

"I'm not sure there is someone who can do Steve's (Ballmer's) job 'better'. It's an incredibly difficult job, perhaps intractable," said Brad Silverberg, a former senior Windows executive and co-founder of Seattle venture capital firm Ignition Partners. "Perhaps the way the job is defined needs to change, and this is the harbinger of bigger changes to come."

(Additional reporting by Liana Baker in NEW YORK; Editing by Jonathan Weber and Miral Fahmy.

  |   August 23, 2013    2:50 PM ET

Microsoft dropped major news on Friday when it announced that its longtime chief executive, Steve Ballmer, is going to leave the company. While it's unclear if Ballmer left on his own or was forced out, it's apparent to everyone that Microsoft just isn't the behemoth it used to be.

Here are four charts that tell us why Ballmer is probably leaving Microsoft:

The Stock Has Tanked
First, the obvious: stock price. Microsoft isn't as valuable as it was when Ballmer took over, and keeping that share price up is a CEO's main responsibility. In 2000, Microsoft was worth nearly $400 billion. On Friday, it was trading at around $286 billion. Lose several billion dollars like that, and investors will take issue.

microsoft charts

No One Is Buying PCs
Underlying that stock drop is the decline of Microsoft's main business: Windows. The PC operating system is the company's biggest money-maker, but customers are increasingly using cell phones and tablets to access the Internet and do everything else they do with computers. Analyst Horace Dediu of Asymco shows how that trend caught up with Microsoft by 2011, when Windows sales actually started declining year over year.

Everyone Buys Tablets
And more than any other product, it's tablets that are replacing PCs that run Windows. See how PC sales slow down as tablet sales shoot up, in this data from research firm IDC.

microsoft charts

And It's Probably Not Changing
By 2012, when Microsoft got around to releasing Windows 8 RT for tablets, the market had already been eaten by Apple's iOS and Google's Android. Microsoft sold far fewer Surfaces than it expected, causing it to take a nearly $1 billion writeoff. The dominance of those two top operating systems is projected to last for some time.

microsoft charts

Alexis Kleinman   |   July 26, 2013   11:29 AM ET

Microsoft boss Steve Ballmer is finally admitting what everyone has been thinking: Microsoft made a huge mistake with the Surface RT tablet.

Last week, the company disclosed that it lost over $900 million on the low-selling tablet computer, and during an internal Microsoft event this week, Ballmer put the disaster into simple, understated terms, The Verge and Neowin separately reported.

"We built a few more devices than we could sell," Ballmer reportedly said.

Despite some good reviews, Microsoft had an extraordinarily difficult time getting the Surface off of shelves, and an overwhelming number of Surface RT tablets have been left unsold. If you break down the $900 million Microsoft lost on the Surface RT, it comes out to about 6 million unsold devices.

Still, Microsoft is working on the next generation of the tablet, and internal response to the new device has been positive at Microsoft, Neowin reports.

It's not just the Surface that has been letting the company down; Microsoft is not selling enough Windows products in general. But Microsoft does have one bright spot: Windows Phone 8 is beating BlackBerry for the coveted No. 3 spot in the smartphone market.

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