Microsoft – Homage to legacy.

Reply to this post

RFM AvatarSmall

 

 

 

 

 

Microsoft pays homage to legacy rather than reinventing a category.

  • The Surface Book is a triumph of engineering but I still think that Microsoft if missing a trick when it comes to re-inventing the PC.
  • Microsoft launched a new Band, 3 Lumia devices, the Surface Pro 4 and its first laptop, the Surface Book.
  • Microsoft also announced that developer kits for the HoloLens will be available early in 2016 for $3,000.

Windows 10 and universal apps.

  • Microsoft already has 110m devices upgraded to Windows 10 and the feedback suggests that Windows 10 is going to be a big success.
  • Most importantly of all, the new App store is seeing good early traction and Facebook has announced that it will make all of its services available as Windows universal apps.
  • Universal apps are apps that will run on any device where Windows 10 is also present.
  • This is very important because it means that Facebook will be returning to Lumia devices giving the phones a badly needed boost.
  • If other major apps providers follow suit this could significantly improve Microsoft’s ability to offer 3rd party apps on its phones which to date, has been a massive hindrance to their acceptance.

Microsoft Band

  • The new Microsoft Band is very similar to the original except that the ergonomics have been hugely improved.
  • The screen is now curved and the rigid edges, that many found uncomfortable to wear, have been replaced with a much better looking product.
  • The functionality remains pretty much the same with the addition of an altimeter and the ability to estimate V02 (maximal oxygen consumption) during exercise.
  • This added functionality will be good for semi-serious athletes and recreational users but I suspect that accuracy will remain far below that which would be required for professional or medical use.
  • If the dreadful Bluetooth radio has been improved, this will be a product that has unique capabilities offering pretty good value even though at $249, it is more expensive than its predecessor.

Lumia

  • Microsoft launched three new devices: the Lumia 950, 950XL and the Lumia 550.
  • The devices promise significant improvements in radio performance but they have a very long way to go to beat the world leading iPhone 6.
  • High resolution cameras promise great quality photos as well as 4K video recording and image stabilisation.
  • What sets them apart is their ability to use Windows 10 and perform like desktops.
  • Plugging the phone, a monitor, keyboard and mouse into the Display Dock allows the phone to perform very much like a PC.
  • The one trade-off is that the Office and Outlook apps that run are still the universal apps that are available on Android and iOS and not the full versions.
  • However, this set up will provide better use of Office than one would get on an iPad Pro simply because mouse support allows easier and better interaction with Office.
  • This will work well for basic editing tasks but does not come close to the functionality that can be achieved with full Office on Windows.
  • Consequently, for a user whose primary requirement is productivity, these devices are a good option but for the consumer there is not much on offer.
  • Of Digital Life services, there was no mention and unless the universal App store really gets some traction with developers, these devices will remain incredibly niche.
  • Hence, I see no reason to change the view that Microsoft’s consumer ecosystem is crumbling and needs some serious attention if Microsoft wants to be a player in this field.

Surface Pro 4

  • The Surface Pro 4 (SP4) is the same size as the Surface Pro 3 but slightly thinner at 8.4mm (vs. 9.1mm) with a slightly larger screen 12.3” vs. 12” created by reducing the bezel size.
  • The SP4 is 30% faster than the SP3, 50% faster than a MacBook Air and will be available with up to 16GB of memory and 1TB of storage.
  • It is still fan cooled and is not the step up in screen size that I was hoping for given the possibilities that the new Intel chipsets offer.
  • The device will start at $899, $100 more than its predecessor but this remains far and away the leading product when it comes to replacing the laptop.

Surface Book

  • This was the one device whose launch was not widely leaked and was certainly the star of the show.
  • This immensely powerful laptop is 2x faster than a MacBook Pro where the screen is detachable to become a large tablet.
  • The device sports two batteries (one in each piece) and three processors (one in the screen and two in the keyboard) which have been engineered to work together or independently.
  • The result is a device that is both a proper laptop and a tablet that can perform both functions flawlessly.
  • However the sting is in the tail as this product is very expensive.
  • The basic version without the discrete graphics processor, i5 and 256GB storage is $1,499 with the highest spec version coming in at a blistering $2,699.
  • This device is far more expensive than the MacBook Pro and does not look as nice meaning that it will really only appeal to those that really need the power that this device offers.

Take Home Message

  • The Surface Book is a step forward in terms of what is possible but I think that Microsoft is still failing to reinvent the laptop category.
  • I have long believed that the laptop form factor is obsolete.
  • I think that the real re-invention of this category will occur when users realise that separating the keyboard from the screen offers a vastly superior and much healthier portable computing experience (see here).
  • Consequently, perpetuating the use case of the laptop is paying homage to legacy rather than reinventing categories as Microsoft promises to do.
  • The ability to pack the power of a full PC into a tablet means that there is no reason to have the screen physically attached to the keyboard.
  • Having the two separate allows for a desktop like computing experience to be enjoyed when the user is not in the office.
  • I think that this results in better productivity, better ergonomics and improved long term health for the user.
  • I would have preferred to see more done with the Surface form factor rather than a step backwards into laptops.
  • Of the consumer there was no sign whatsoever and my only hope for the consumer ecosystem is that Xbox and universal apps drive better appeal for the Lumia product line.
  • This will require marketing investment as the phone market share is not about to recover from simply being under the halo of Windows 10.
  • Microsoft still has plenty of upside as so little is expected of it but the question marks remain over the consumer ecosystem.

 

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.

Blog Comments

Unfortunately not as: Screen still too small. Stupidly expensive and keyboard does not work when detached from screen.