7-inch Surface Smacks of Microsoft Desperation

Microsoft's rumored plans to dive into the 7-inch tablet fray have been interpreted as a last-ditch attempt by the software giant to remain relevant in the post-PC world.

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Editor’s note:  As part of our special editorial partnership, Channelnomics is publishing this recent article from CRN in the UK.

Microsoft Corp.'s rumored plans to dive into the 7-inch tablet fray have been interpreted as a last-ditch attempt by the software giant to remain relevant in the post-PC world.

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According to a report in the Wall Street Journal, the software giant is planning to launch a 7-inch version of its Surface device, with mass production expected to start later this year.

Jeremy Davies, co-founder of market watcher Context, claimed Microsoft is struggling to remain relevant in a world where tablets are the preferred form factor for most consumers.

"I would not say it is desperate quite yet but this is an urgent move from Microsoft to keep in the game," he said.

While Microsoft's traditional desktop and notebook market is declining at its fastest rate ever -- not helped by Windows 8 -- the vendor has also yet to make much of an impression in the tablet market, either through Surface or OEM partners.

As of mid-March, Microsoft had reportedly shipped just 1.5 million of its 10-inch Surface RT and Pro tablets, despite analyst estimates that three million had been made. It is as yet unclear if and when resellers will be given access to the devices.

Crucially, Microsoft is just a peripheral figure in a 7-inch tablet market tipped to boom this year. According to analyst NPD Display Search, tablets with 7-inch to 8-inch screen sizes will account for 45 percent -- or 108 million units -- of the market this year.

With nearly all the OEMs siding with Android rather than Windows 8 in the 7-inch space, Microsoft has little choice but to enter the market under its own steam, Davies said.

"Microsoft must be scared silly at the rate of change and the number of tablets that are not running Windows," he said.

"The iPad Mini and Nexus 7 are going absolute gangbusters, and Microsoft is just seeing its market share slip away. Surface has been a damp squib, and now they are trying to get in on 7-inch to stay in the game. Windows 8 is an also-ran [in the tablet market] -- no matter how hard Microsoft and the OEMs are trying -- so what else can they do?"

According to figures from IDC released last night, global PC shipments bombed by 14 percent year on year in Q1, the biggest drop since the analyst began tracking the market 19 years ago. It fingered Windows 8 for slowing down what was an already ailing market.

Richard Gibbons, software manager at reseller Bechtle, said Microsoft would be "crazy" not to enter the 7-inch tablet space given the success of the iPad Mini, Nexus 7 and Kindle Fire.

"Even if it is seen as a 'me too' move, that is not a bad thing ultimately... if consumers want it, Microsoft should offer it," he said. "I think it would be a good move and should definitely help increase awareness and sales for Windows 8/RT and Microsoft devices in general."

For more UK channel coverage from CRN, visit www.channelweb.co.uk

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