Microsoft, Facing Lackluster Surface Sales, May Get Small

Perhaps you're not a fan of Microsoft's Surface tablet. Would you prefer to try something a little... smaller? Microsoft might be ready to oblige you.

According to the Wall Street Journal, Microsoft that it apparently plans a smaller 7-inch Surface, one that would compete with the Google Nexus 7, the iPad Mini, and Amazon's Kindle Fire. It will apparently launch the new product as part of a broader overhaul of its Surface tablet lineup later this year.

Microsoft may have had little choice. Its Surface and Surface RT tablets haven't exactly lit the world on fire, while sales of the smaller iPad and Android tablets have taken off.

Microsoft originally envisioned the Surface as an answer to the exploding tablet market, which is starting to dominate the computing landscape and is cutting into sales of traditional PCs. Microsoft hasn't formally released sales numbers, but IHS iSuppli estimated that Microsoft sold, at most, one million Surface tablets during the fourth quarter, compared to a record 22.9 million Apple iPads, plus millions more Nexus 7s, Kindle Fires, and other 7-inch tablets.

The Surface, of course, has been hampered by its relatively high price, consumer dissatisfaction with the new Windows 8/RT operating system, and the lack of Windows RT applications for the Surface RT. It's worth noting that both of the latter  factors would weigh every bit as heavily on a hypothetical Surface Small.

But what impact would shrinking the form factor have on the Surface? Let's take a look.

Portrait Mode Problems

On the, er, surface, shrinking the Surface to a 7-inch form factor is a terrific idea. A 7-inch tablet is slender enough for most male hands to hold comfortably, and it fits well inside a purse, protective sleeve, or the relatively roomy pockets of my khakis. As Amazon's Kindle demonstrated, the tablet is about the size of a book page.

But orienting the Surface in portrait mode — the most comfortable way of holding a 7-inch tablet, in my opinion — is problematic. From my experience in playing with the Surface (I don't own one), some apps work well in portrait mode. But the Windows 8 desktop isn't really optimized for vertical viewing.

Analyst Tim Bajarin concluded much the same thing:

Windows 8 and Surface appear to be built primarily for one mode: landscape. Given that Windows 8 is built for a 16:9 format, this is not surprising; the software was architected for landscape. Although the screen can be used in portrait mode, doing so presents a far less enjoyable experience than in landscape. For some, this may not be a problem, but for me it is fundamentally counter-intuitive to what I consider a pure tablet experience.

Specifically, Bajarin called out Skype and the Office keyboard for failing to work in portrait mode. 

Of course, there's no reason Microsoft couldn't update the Windows software and apps to better support portrait mode. It would have to do so, though, to make a smaller 7-inch Surface a pleasant user experience by the time that product launched.

Shifting From Writing to Reading

One of the chief advantages of the Windows RT version of Surface is the Office package that Microsoft bundles with it. The 32GB version of Windows RT costs $599 with a Touch Cover; for $139.99, you can buy a standalone version of Office Home and Student 2013 for a PC. In other words, Microsoft is tossing in a software package worth a quarter of the Surface RT's price, for free.

Users could continue to use Office within a 7-inch environment. But combining Office with a Touch or Type Cover turns the Surface into a content-creation device. There's really no way Microsoft could release a 7-inch Touch Cover, or bundle a full-sized Touch Cover with a 7-inch device. Both would look awkward. (Yes, like other tablets, you could still wirelessly connect a Bluetooth keyboard.)

If you remove those elements, the Surface probably sinks to the level of a Nexus 7 or Kindle Fire, both designed as shopping and read/watch/play portals to the Google and Amazon content stores. In this space, Microsoft simply doesn't have the clout to compete with the other two vendors, and its lack of apps versus the iPad mini will be thrown into sharper focus.

Metro Only?

Could Microsoft design a 7-inch Surface strictly around the Metro interface? It would be a bold move, and a risky one; again, Microsoft would risk frustrated consumers fumbling around with Web pages when rival tablets had dedicated apps in place to perform the same functions.

But the Windows 8 desktop environment would probably look even more out of place in a 7-inch form factor than on the larger 10-inch Surface. And on Windows RT — the only real Windows OS one would run on a 7-inch tablet, with an ARM chip inside — the desktop is sort of an afterthought, anyway. At that point, Microsoft would probably have to decide to eliminate Office from the tablet altogether.

Thank goodness there's a Netflix Windows RT app.

Xbox Integration?

Microsoft has already taken the first steps toward combining the Xbox 360 game console, tablets and phones with SmartGlass, an app that makes the mobile device a "second screen" for gameplay. If Microsoft were to release a tablet optimized for playing games and watching TV or movies, what better way to do than to align it with the Xbox?

Years ago, Microsoft developed a line of small tablets dubbed UMPCs, which failed to take off, among other reasons, because their battery life stank (i.e., it was on the order of a few hours). But maybe the time is right to try a smaller Microsoft tablet once again.

Some love the Surface. I think it's great, and I still may pick up a Surface with a Type Cover myself. Thinking that shrinking the Surface down to a 7-inch form factor will immediately revitalize sales, though, is wishful thinking. 

Still, Microsoft needs something to jumpstart sales, and a conservative, follow-the-leader approach towards a smaller form factor can't hurt. But Microsoft risks losing a lot of what makes a Surface a Surface if it does so.