Surface Book gives PC market a shot in the arm

Microsoft's first Windows laptop, the Surface Book, takes on Apple's MacBook Pro and its two new Lumia phones may give Blackberry more trouble.

Microsoft made a surprise device launch with a business focused laptop, the Surface Book, which could draw the attention of enterprise IT and compete with Apple MacBooks.

At its much anticipated Windows 10 Devices event in New York this week, Microsoft introduced a slew of new devices, most notably, the business-focused Surface Pro 4, and two new Lumia smartphones along with its first ever laptop, the Surface Book.

All the devices will run on Windows 10, which analysts say is a plus for Microsoft as there will be less fragmentation for IT admins to manage. This will add to the 110 million devices that run on Windows 10 today, including eight million business PCs, just eight weeks after its launch, Microsoft said.

"Microsoft is going to war in the hardware space," said Bob Egan, CEO and chief analyst of the Sepharim Group, LLC, in Falmouth, Mass. "The positioning of the Surface Pro 4, and the Surface Book, is specifically intended to go against Apple's MacBook Air and the MacBook Pro, and differentiate itself with a more portable experience."

Microsoft's surprise Surface Book laptop features a detachable 13.5-inch screen that can be used as a tablet, runs on the latest Intel Skylake Processor and the newest NVIDIA GeForce GPU.

With this device, Microsoft has given the Windows PC new life, said Patrick Moorhead, president and principal analyst of Moor Insights & Strategy, a tech analyst firm based in Austin, Texas.

"For the first time in years, Microsoft and the PC platform have some momentum here," Moorhead said. "The Surface Pro 3 has been selling well, and it's in a category that is a real category now with Apple and Google coming into the fray. Microsoft took a great device and made it better with the Surface Pro 4."

Microsoft, one of the largest software companies in the world, has made gains in its hardware business since the launch of its first Surface device. The company's Surface business garners over $3.5 billion a year, the company said, and sales have doubled in the segment within the last year.

While one might think the top PC vendors Lenovo, HP and Dell are threatened by business partner Microsoft's launch of two new Windows 2-in-1 devices, analysts say that isn’t the case;  it's Apple's MacBooks that Microsoft has in its crosshairs.

"Apple launched a shot across Microsoft's bow with the iPad Pro, and this is retaliation to that," said Jack Narcotta, industry analyst at Hampton, N.H.-based Technology Business Research, Inc. (TBR). "Microsoft is going for the high-end line. It's really clear that they are meant to be the reference designs for what Windows can do."

The price point of the Surface Book and Surface Pro 4, starting at $1,499 and $899, respectively, is more comparable to Apple's asking price for the MacBook Air and MacBook Pro than PCs from other OEMs, Narcotta said.

"Businesses have been looking for that device or family of devices they could invest in that will continue to be innovative, and I think Microsoft has gotten there today," said Wes Miller, a research analyst at Kirkland, Wash.-based Directions on Microsoft. "I think we'll see a lot more businesses looking at these, and Microsoft will have a good last half of their physical year based on the hardware sales."

The Surface Pro 4 and Surface Book will be very appealing to businesses, Miller said, as they are secured out of the gate with Windows Hello support, fingerprint authentication, and facial authentication.

"Microsoft has built in the security features," he said. "This is a showcase of what Windows 10 can be from a security and manageability perspective. The Surface Book looks like it's about performance and experience. The overall package is what's important in the end."

Both Surface devices are available for pre-order today and will be released on October 26. The Apple  iPad Pro will launch in November.

LUMIA 950 and 950 XL

Still using the Lumia brand name from the Nokia acquisition, Microsoft unveiled two new smartphones in the Lumia 950 and the Lumia 950 XL.

Microsoft's new flagship phones are not intended to upend Apple and Google in the consumer world, nor will they, but analysts say the new devices are bad news for BlackBerry as the mobile enterprise could opt for Microsoft over the ailing Canadian phone maker.

"With BlackBerry dying on the vine, there is an opportunity for Windows to supplant BlackBerry as a business communication platform," Narcotta said. "Microsoft wants to give IT control by saying 'here is a mobile device that uses the same access to corporate resources that your PCs use.'"

With professionals using iOS and many different version of Android, IT admins are challenged by the fragmentation of mobile operating systems, Narcotta said. This is why he believes there could be a point sooner rather than later where businesses will issue new employees Microsoft branded phones.

Though it is no longer the prominent mobile device manufacturer it once was, BlackBerry is still prevalent in government and corporate environments. This could be about to change with new high-end Windows 10 smartphones on the market, Miller said, as he sees "a concert of reasons" to opt for the new Lumia devices over a BlackBerry phone.

"Microsoft has built its own [mobile device management in Windows 10," he said. "Those docs are secured. You can manage through Azure Active Directory. BlackBerry's solution is good, but in this day and age, if you're a Microsoft shop, what Microsoft has to offer is much more compelling than that offering."

With the phones being able to seamlessly connect with Windows PCs, the most widely used business machines on the market, it only adds to the draw of having Windows on employees' phones as well, analysts said.

At the event, the company demoed the Continuum feature of Windows 10 on the phones, connecting a Lumia 950 XL to a monitor. When connected, the user was presented with a PC like experience on the screen, including a cursor and start button. While working in Microsoft Office applications as if he was using a PC, the user could also use the phone itself without issue.

The new phones feature 5.2-inch and 5.7-inch OLED displays over a Qualcomm Snapdragon 810 processor and a 20MP camera. When the battery is depleted, the new phones can reach over 50% charge in less than 30 minutes of charging, Microsoft said. The Lumia 950 and 950 XL start at $549 and $649 unlocked.

Ramin Edmond is a news writer with TechTarget's End User Computing media group. Contact him at [email protected]

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