Microsoft will release new Surface tablets on Tuesday. Here's how CEO Satya Nadella could cause a stir.
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Since taking over for Steve Ballmer, Microsoft CEO Satya Nadella has earned mostly plaudits from investors and commentators. This Tuesday, however, Nadella will face his toughest test yet, when he is expected to emcee the company's Surface event in New York. Nadella will be posed a challenge Ballmer never surmounted: demonstrating that Microsoft's struggling tablet lineup not only is viable, but worthy of expansion.
To date, Nadella's most-praised moves, from the long-awaited Office for iPad's debut to a barrage of new Microsoft Azure features, stem squarely from his comfort zone -- software and cloud services. But hardware is a different story. In the most recent quarter, Microsoft reported improving Surface margins thanks to a sales mix that includes more of the pricier Surface Pro and Surface Pro 2 models, which indicates some momentum among business users. But the company still loses money on every device it sells.
Nadella and other Microsoft figures, including Bill Gates, have made only fleeting references to Surface. The most interesting of the comments suggest Microsoft is less interested in its tablet's upfront profit than in the device's potential trickle-out benefits, such as app sales and cloud service subscriptions. But analysts estimate Surface devices account for only 1% to 2% of the tablet market. Unless this niche user base buys additional products and services at a prolific rate, it's hard to know if the Surface line's ecosystem benefits are worth the R&D and manufacturing costs, which some critics claim would be better spent on software development.
What will Nadella bring to the table? Here are five things to watch.
1. Microsoft will announce a "mini" Surface equipped with Windows RT, a 7- or 8-inch screen, and an advanced stylus. A rumor mill fixture for over a year, the so-called Surface Mini reportedly was delayed at the last minute last fall, when Microsoft unveiled its second-generation devices. It's likely to make the cut this time; all reports about the device rely on anonymous sources, but the rumors generally come from publications with good track records for pre-release Microsoft details, including The Wall Street Journal and Bloomberg.
Current Microsoft Surface tablets feature 10.6-inch screens, but that could change by Tuesday.
The Surface Mini is expected to have a screen that measures 7 to 8 inches diagonally -- possibly with a 4:3 aspect ratio like the iPad's, rather than the more horizontal 16:9 screens found on most Windows tablets. A Qualcomm ARM chip reportedly will handle processing, which, if true, means the device will run Windows RT. The Mini allegedly will include a highly sensitive stylus and emphasize digital note-taking.
2. Microsoft could launch at least one additional Surface model that runs the full version of Windows 8.1. Tuesday's event is expected to include, not only the Surface Mini, but also at least one additional device that reportedly will use an Intel processor. Unlike ARM chips, which run Windows RT and thus don't support desktop apps, Intel models can run the full version of Windows 8.1. Some have speculated Microsoft might release two Surface Mini models, one with Windows RT and one with Windows 8.1. For other theories, see the next item.
3. The additional model could be a 12-inch Surface Pro. Though the Intel rumor could indicate multiple mini tablets, others expect a plus-size Surface Pro. "There are strong indications that there is a 12-inch
Michael Endler joined InformationWeek as an associate editor in 2012. He previously worked in talent representation in the entertainment industry, as a freelance copywriter and photojournalist, and as a teacher. Michael earned a BA in English from Stanford University in 2005 ... View Full Bio
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