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Microsoft's late to the mini tablet market, but still has a shot at sales

Gregg Keizer | May 8, 2014
Microsoft may be ready to roll out a small tablet later than rivals, but analysts say a petite Surface is still a good idea.

Microsoft may be boarding the small tablet bus later than rivals, but it's not missed the connection entirely, analysts said today.

According to severalonlinereports, Microsoft will introduce a smaller-screen Surface on May 20 at an invite-only event in New York City. Dubbed "Surface Mini" in lieu of an official moniker, the device is expected to sport an 8-in. screen, come with a stylus, and be promoted primarily as a digital note taker.

Smaller tablets will continue to account for the majority of tablets shipped in each of the next five years, but their share of the total will continue to shrink as they face pressure from larger-sized smartphones, said Jitesh Ubrani, an analyst with IDC. Consumers who buy a bigger smartphone — one with a screen 5-in. or larger — are much less likely to make a second purchase of a 7-in. or 8-in. tablet.

Even though Microsoft will be entering the 8-in. or smaller tablet market later than competitors — more than three-and-a-half years after Samsung started selling the Galaxy Tab and 18 months after Apple debuted the iPad Mini — and the sales explosion of that segment is already in the past, a petite Surface is still a good idea.

"It's important to have something at the smaller screen size," said Ubrani of Microsoft and its portfolio. "Price matters to many tablet buyers and smaller tablets are simply cheaper."

"In our data, it is clear that consumers are choosing small when it is considerably cheaper," echoed Carolina Milanesi, chief of research at Kantar Worldpanel ComTech. "They use it for content and they tend to share it more with other members of the family."

How low Microsoft will go is unknown — it will presumably reveal pricing at the New York event — but because Surface is touted as a premium line and because Microsoft would need to turn a profit on the hardware, some are skeptical that the company can compete on price.

"I think [a Surface Mini] would remain in the $249-$299 range," speculated Sameer Singh, an independent analyst whose Tech-Thoughts website specializes in mobile technologies. "I don't think Microsoft can afford to compete with low-end Android and 'white box' manufacturers on price."

That price range is in the same ballpark as the much more established first generation iPad Mini — which lists for $299 — and significantly higher than most top-tier Android tablets in the 7- to 8-in. format.

The latest Surface Mini scuttlebutt claimed that Microsoft will position it as a note-taking device, differentiating the tablet from the glut of cheap tablets used almost exclusively for consuming content — watching videos, browsing the Web and so on — by tilting toward Microsoft's forte, productivity.


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