Sept. 23 - Microsoft unveils two new powerful and visually enhanced Surface tablets, but analysts say the products still may not have the appeal to sell the millions per quarter needed to catch up to the iPad. Conway G. Gittens reports.
REPORTER ON CAMERA: CONWAY G. GITTENS, REUTERS REPORTER (ENGLISH) SAYING: "If at first you don't succeed…well...try again. That's Microsoft's strategy when it comes to its Surface tablet." UPSOUND: INTRODUCING THE SURFACE "Let me introduce you to Surface Pro 2." Don't adjust that screen - the Surface Pro 2 aimed at corporate clients looks just like its predecessor and still carries a hefty price tag at $899. And its consumer-friendly sister, Surface 2, may still have trouble making friends, costing $449. Keep in mind, last quarter Microsoft had to take nearly a billion dollar write-down for unsold inventory, shipping only 298,000 units, according to tracking firm IDC. The consensus is Microsoft has a lot of units to sell if it's going to stay in the game. Ross Rubin of Reticle Research and Avi Greengart of Current Analysis: SOUNDBITE: ROSS RUBIN, PRINCIPAL ANALYST, RETICLE RESEARCH (ENGLISH) SAYING: "Certainly a couple of million per quarter, ramping up towards the volumes we see Apple sell." SOUNDBITE: AVI GREENGART, RESEARCH DIRECTOR OF CONSUMER DEVICES, CURRENT ANALYSIS (ENGLISH) SAYING: "I think they do need to sell in the millions. They need to start edging closer to where Samsung is as a number two or number three player." And speaking of three - Microsoft is keeping the original Surface RT, which saw a drastic price cut earlier this year, meaning buyers will have at least three Surface tablets to choose from this holiday. But for the man in charge of the Surface, there's three products but only one message. SOUNDBITE: PANOS PANAY, CORPORATE VP, MICROSOFT SURFACE (ENGLISH) SAYING: "It can transform itself from a tablet to a laptop and we've made that experience seamless and as good as can be." Bells and whistles on the second generation range from better visuals, sounds, battery life, key boards, and an improved kick-stand for portability, but for Greengart it's the 100,000 apps and the upgrade to Windows 8.1 that may be the best selling point this time around. SOUNDBITE: AVI GREENGART, RESEARCH DIRECTOR OF CONSUMER DEVICES, CURRENT ANALYSIS (ENGLISH) SAYING: "A lot of things that were wrong with Windows 8 have been fixed with Windows 8.1. That doesn't necessarily mean Microsoft has jumped ahead of anybody." Doesn't sound like a ringing endorsement, does it? Analysts are holding back with Apple predicted to unveil a new iPad in October. Pre-orders for Surface 2 begin Tuesday and go on sale in 21 markets beginning October 22.