Case Study – Microsoft Surface vs Apple iPad Since its first introduction in 2010, Apple iPad has been dominating the tablet market. It is safe to say that the Apple iPad paved the road for the modern tablets. Nearly every company tried to copy the iPad, except Microsoft. In fact, Microsoft tried really hard to differentiate itself completely from the usual tablets on the market and compete directly with the iPad. In 2012, the company created a tablet, which can run both in tablet mode and desktop mode, and named it “Surface RT” or simply “Surface”. The Surface came with multiple preloaded software and the ability to edit Microsoft Office files. Microsoft Surface was without a doubt unique and unprecedented and had all the bells and whistles. Thus, one may ask, Why is Microsoft struggling to make sales on its tablets despite their versatility, features and smart design? What are the primary mistakes Microsoft made that had led to the Surface suffering in the Tablet market? What branding mistakes led to this current predicament for Microsoft? There is a number of mistakes or poor decisions that could have led the Microsoft Surface sells to suffer in the market. First and foremost, Microsoft missed the mark on branding its tablets. The name “Surface” used to be associated to an interactive computer table with a big touchscreen. Only few people knew of the existence of that device. Thus, after the failure in the Surface table, Microsoft decided to reuse the name for its new brand of tablets, which may have not been such a good ideas. When Microsoft first presented the Surface in 2012, the company went with a fun musical-type advertising with teenagers dancing and jumping around. Microsoft marketing strategy was to show how much “fun” and “cool” its tablet was, unfortunately the public did not see it that way. Microsoft’s ads were perceived as goofy and childish. This was Microsoft first step toward disaster. Secondly, “Windows RT”, the first Operating System (OS) used in the tablet was a complete fail. It has the look and feel of Windows 8, however lacks all of the functionality that makes a full desktop OS useful (Summers, 2013). In another words, Windows RT is an extremely water-down version of Window 8. Windows RT proved to be incompatible with most Windows software such as XP and 7 as well, which was supposed to be one of the important selling points. As if Microsoft did not learn from Windows Vista compatibility issues. Moreover, the Surface RT had limited apps available in its App Store. In this app-craze world, that was a definite deal breaker for most consumers. After seeing how poorly its Surface RTs were doing, Microsoft decided to slash their price. This strategy aimed to move the tablets quickly off the shelves and hopefully make some money alongside; but the company still ended up taking a $900 million loss for unsold tablets (Mokey, 2013). To compensate the OS Windows RT limits, Microsoft would brag about all the options and features the Surface offers that the iPad doesn’t, USB port, memory card slots, stylus capability etc. These same “awesome” features proved detrimental to its sales. Microsoft forgot to note that the typical consumers do not care too much about the options. They are impatient and do not have time to think about SD cards or stylus or the fancy keyboard attachment. Another important reason for the Surface struggle is the pricing. Compare to the other tablets on the market, the Surface is overpriced. The Surface RT was priced at $400-$500 and the Surface Pro2 was priced at $500-$1000. The low-end version of the new Surface Pro3 is $800 (without the keyboard cover) and the high-end goes for about $2000 (without the keyboard cover). The Microsoft’s Surfaces are not money-savers over Apple’s tablets or any tablet. The lower-end Surface Pro 3 with the keyboard costs more than other tablets and even some 2-in-1 laptops on the market. It seemed as Microsoft just did not get the tablet market. In addition to the high pricing, Microsoft was over ambitious about the targeted segments for its tablets. The Surface just like other tablets is clearly a niche product, which only a certain category of consumer would be interested in. Even though Microsoft is aware of that, it is still trying to target all segments. Apple on the other hand successfully identified its targeted segments for all its products and stuck to them.
What recommendations can you make to Microsoft that will help them understand their mistakes in branding, promotion and pricing that led to this current market share? Microsoft Surface’s brand name seems to be associated with bad sales, however there is still hope for the company to redeem its name. A good marketing campaign could really help the company with it tablets’ sales. Microsoft needs to extend its tablet brand image beyond the visual design. Instead of it repeatedly showing the different features the Surface has and the iPad does not, Microsoft could show actual users interaction with device in a professional way. Microsoft should focus on its targeted segments (professionals, students, business owners) and nothing else. Additionally, Microsoft should drop the price of the Surface. Even though the company could justify the Surface’s pricing, the device is nonetheless overpriced. In this competitive tablet’s market, high pricing is not the way to go. Many tablets and 2-in-1 laptops offer similar features as the Surface with lower price base. Microsoft should also remember the goal behind its product design. The Surface is developed as a more tablet-PC hybrid and not a simple tablet like the Apple iPad. Therefore, Microsoft should not compare the Surface to other tablets but instead to PCs. We can see this change in the recent ads where the Surface Pro3 is being compared to the MacBook Air and the MacBook Pro. The perceptual map below show shows how the Surface Pro 3 stacks up against the Apple iPad and couple other tablet/PC hybrids.
Table 1. SWOT Analysis SWOT Microsoft Surface Pro | Strengths 1. Memory card slot 2. USB port and Stylus 3. Kickstand 4. Microsoft Brand Awareness 5. Microsoft Brand reputation 6. Brand Loyalty | Weaknesses 1. Bad marketing Strategies 2. Poor brand differentiation 3. Battery life 4. High pricing 5. Negative reviews with Windows RT | | Opportunities 1. Tablet – PC hybrid market 2. Increase in demand 3. Better targeting strategy | Threats 1. Competitors: Apple, Samsung, Dell, HP etc. 2. Market saturation |

Figure 2. Perceptual Map Price Features / Software | Microsoft Surface Pro Lenovo Yoga 2 Pro Samsung ATIV Smart PC | | | High | HP Pavillion x2 | Apple iPad | Low | | | Low | | High

REFERENCES 1) Summers, N. (2013, July 19). Surface RT, The Sinking Ship: Why Windows RT Is Failing. Retrieved from http://thenextweb.com/microsoft/2013/07/19/windows-rt-the-sinking-ship-why-microsofts-mobile-focused-windows-8-approach-is-doomed/ 2) Mokey, N. (2013, October 14). Microsoft confesses Surface RT branding failed | Digital Trends. Retrieved from http://www.digitaltrends.com/computing/surface-rt-branding-was-a-mess-microsoft-brass-confesses/