Will Surface Pro 4 make Microsoft the Market Leader in 2-in-1 Tablet Segment?
Earlier this month, Microsoft announced the Surface Pro 4 that will be thinner, lighter, faster, and with facial recognition. The Surface Pro 4 will be available in the Microsoft stores today, 26thOctober. The per-order stock for all models at the Microsoft online store are sold out and looking at the response; it would not come as a surprise to see long queue at the Microsoft stores on the day of launch. Microsoft will and should use this as an opportunity to create a marketing strategy to promote the newly launched Surface Pro 4. Microsoft will have limited quantities of Surface Book available in store on 26 October to generate more demand, and it will also make online availability with new Surface Pro ship dates soon.
Surface Pro 4 is Microsoft’s upcoming laptop-tablet hybrid that can be used as a Windows computer and a tablet. More interestingly, Microsoft has targeted companies. Berkshire Hathaway Automotive, the car dealership arm of Warren Buffet’s legendary corporate holding company has already ordered Surface Pro 4 tablets for their employees. Joining Berkshire, 12 other companies like USI Insurance and the Land O’Lakes dairy giant have done the same. All these companies will use the Surface Pro 4 as a laptop at their desk and as a tablet when they are with the customers. It gives the companies an added advantage of 2-in-1 tablets or hybrids, and Microsoft is finding its way into companies where it has its enterprise business. The growth in the 2-in-1 market will help boost Microsoft’s confidence in promoting Surface Pro 4. The long-term tablet business contracts in 2015 but the 2-in-1 portable tablets seem to grow. By 2019, 2-in-1 tablets growth will show a five-year compound average growth rate (CAGR) of 57 percent while Slate tablet growth will amount to a 2 percent five-year CAGR.
Windows will benefit from the growth in this segment as the Surface Pro 3 did good business. Surface tablet revenues grew 117 percent to $888 million, driven by Surface Pro 3 and Surface 3 that were launched in June 2014 and May 2015, respectively. The Dollar sales of Microsoft’s Surface tablets more than doubled in the company’s fiscal fourth quarter and grew 65 percent for the year. Recently Microsoft shared their earnings that stated the revenue for the company was down during the first quarter of its 2016 fiscal year. In the earnings report, it mentioned that its Surface revenue had been climbing quickly over the past year. The income had fallen to $672 million from $908 million in the same quarter of 2015.
According to the reviews of the Surface Pro 4, Microsoft has finally designed something that can replace the laptops. Microsoft’s mission to replace laptops started with the launch of Surface Pro 3 and it has surely nailed it with the fourth one. For the Advertising and Marketing, the Surface Pro 3 had a narrower target. Microsoft targeted Apple’s MacBook Air while promoting Surface Pro 3 which backfired the brand. Surface Pro 4 solves the problem of laptop and a tablet, and that worked for the brand with promising sales. Microsoft is selling to the target audience looking for the benefits of a tablet and laptop, without buying both, and spending less.
The debate whether tablets will be able to replace the laptops has been going on for a long time. It seems Microsoft has finally cracked the code with Surface Pro 4 with latest Intel processors, larger screen, Windows 10, and success of its predecessor, Surface Pro 3.
The advantage of Surface Pro 4 is that Windows cover 85 shares of the operating system market. Microsoft is and should target companies that the brand is in business for their enterprise solution business.Microsoft has traditionally owned the enterprise computing market, but Apple has entered the market in recent years by teaming up with IBM to sell hardware to companies. To tackle this, Microsoft have come up is offering a permanent trade-in program, allowing companies to sell their Windows PCs, Macs, and even iOS devices and put the money towards new Surface devices. Another target market for Microsoft would be students as it is a perfect 2-in-1 product. The brand does offer a student discount on Surface Pro 3, and it is a good strategy to increase the market share. Microsoft has to promote Surface Pro 4 on its strength; that is design, style, Windows 10, and most importantly 2-in-1 tablet. Reviews have been great, but the actual performance will be known after the official launch. Recently Microsoft has announced that it has more than 5,000 re-sellers on board to expand its sales channel. The increase of dealers will lead to sales of more Surface Pro 4 tablets.
Surface Pro 4 seems to have Microsoft best shot at luring the crowd and maybe it is a product that will help the brand become a market leader in the 2-in-1 tablet segment. The performance and demand for the product will decide the future of much awaited Surface Pro 4.