On the eve of a big Microsoft announcement, the industry is waiting to see if a smaller, more compact iteration of the Surface tablet is part of the company's new "mobile-first" approach to IT.
Tomorrow, the tech press will descend on Lower Manhattan to see what Microsoft has in store for its Surface tablet product portfolio. The invitation from the Redmond, Wash.-based software and cloud services giant promises a Surface-themed "small gathering," a clue that Microsoft's tablet is shedding some inches.
The company is widely expected to announce a smaller version of the non-Pro Surface tablet. The original Surface and Surface 2 are 10.6-inch tablets that run Windows RT, the ARM-compatible flavor of the company's touch-optimized Windows 8 operating system.
Despite a big launch alongside Windows 8 in 2012, Surface RT failed to gain much traction in the competitive tablet market. Unlike the Surface Pro, Surface RT tablets can only run ARM-friendly "modern" Windows (formerly Metro) apps, effectively shutting out the massive x86-based software library that Windows has amassed.
Class-competitive specs, premium build quality and an innovative keyboard/cover didn't sway the market. Consumers largely shunned the Windows-in-name-only experience, causing Microsoft to post a massive write-off last summer due to slack Surface RT sales.
Microsoft Chief Financial Officer Amy Hood said at the time that as a result of a price cut and "inventory adjustments for related parts and accessories, we recorded a $900 million charge to our income statement."
Now, after compact tablets like Apple's iPad Mini and Amazon's Kindle Fire have reshaped the tablet market, Microsoft appears poised to try again.
According to a study by the Consumer Electronics Association (CEA) small tablet ownership (7 and 8 inches) increased from 25 percent in June 2013 to 32 percent in December 2013. Ownership of full-screen tablets (8.9 and 10.1 inches) dropped to 68 percent in December 2013 from 73 percent in June 2013.
NDP DisplaySearch forecasts that tablet shipments will reach 315 million units this year. Tablets measuring less than 9 inches will comprise two-thirds of those shipments, predicts the market research firm. ""Momentum for the tablet PC market is in full swing as they have become the dominant mobile PC form factor," said NPD DisplaySearch Senior Analyst Richard Shim.
To compete, not only is Microsoft downsizing the Surface, the company is making a major change.
The mini Surface will sport new processors from Qualcomm, according to a May 7 report in Bloomberg. To date, Microsoft has been sourcing Tegra mobile processors from Nvidia for its Surface RT hardware.
Qualcomm is the smartphone chip leader, noted the report. While its processors can be found in the strong-selling Samsung Galaxy line of handsets, the company's fortunes have not carried over into the tablet market.