Don’t Be Concerned by the Surface Release Schedule (Premium)

On the eve of Microsoft’s next press event, anxiety is high: Surface Pro 4 and Surface Book are now over 18 months old and there are no replacements in sight. What’s going on? Is Microsoft mismanaging a once-proud hardware lineup in the same manner it allegedly did with Nokia?

Folks, relax. It’s not that bad.

But since we now live in a knee-jerk, A.D.D. world in which our navel-gazing misgivings can be broadcast around the world in seconds, we obviously have to over-analyze this. So let’s look at what’s really happening and then try to figure out why it’s happening.

As you may recall, Microsoft announced Surface Pro 4 and Surface Book in October 2015, over 18 months ago. That’s over 10 years in dog years, and it isn’t all that long compared to some Apple product revisions. But it’s also fair to say that most major PC makers update their core products about once a year. And that Microsoft has never taken so much time to revise its Surface Pro lineup.

Worse, Surface Pro 4 and Surface Book are both based on the Intel Skylake platform. And I know from multiple sources that these products have endemic hardware issues that, in some cases, actually can’t be fixed. You’d think Microsoft would want to upgrade them to Kaby Lake, at least, and more quickly, not more slowly.

But that hasn’t happened.

According to sources both public and private, Microsoft long intended to host a Surface hardware event in April 2017, and looking at the calendar today I can see that that isn’t going to happen. Adding to the confusion, next week’s Microsoft event is focused on Windows 10 Cloud (final name TBD) in education. And while there will almost certainly be a Surface hardware device announcement of some kind, it will not be a new Surface Pro or Surface Book. At least not according to Microsoft PR, which told me and some other journalists and bloggers this specifically.

I wrote recently about a source who has now seen a Surface Pro 4 revision in person, twice. According to this source, and later corroborated by others, Microsoft is not doing what I think needs to be done with Surface, which is a major upgrade that drops the proprietary and limited Surface Connect power connector for a more powerful and versatile USB-C/Thunderbolt 3 solution. Instead, this revision utilizes Surface Connect like previous generation devices. It will come with Kaby Lake processors, at least, but otherwise will very closely resemble today’s Surface Pro 4.

Of course, the big question about this device is when. If Microsoft is not going to announce this update at next week’s event, will it hold a separate event? Will it do so at Build? Will it not even hold an event, as it did with Surface 3?

That I don’t know. But all of these questions, plus news that Surface revenues plummeted by 26 percent to $831 million (from $1.3 billion a year ago) in the most recent financial quarter, have triggered some anxiety, some angst, in the Microsoft community.

Ars Technica’s Peter Bright openly questioned why Microsoft was trying to turn its Surface business into the next Nokia, which is a bit dramatic. He and I differ on how Microsoft handled Nokia’s hardware business and Windows phone, in that he believes that Microsoft could have taken steps at some point to save that business. And I believe that was never going to happen, no matter what Microsoft did.

But that belief explains his stance on Surface: Peter is understandably worried that Microsoft is making the same mistakes all over again.

My view is that Microsoft misjudged or at least mishandled Surface by one quarter. Let me explain.

We know from Microsoft Chief Marketing Office Chris Capossela that Microsoft intended a major Surface product refresh for April 2017. This is a better time frame for such releases, he told Mary Jo Foley and me on Windows Weekly, as opposed to the Fall schedule Microsoft had previously used. It’s why Samsung always releases its own flagship handset around this time, for example.

But April has come and gone. And while I can’t explain that, exactly, I think I can explain the strategy.

We have two devices, Surface Book and Surface Pro 4. A Surface Book refresh is less important since Surface Book was in fact already refreshed, in October 2016. And because that product doesn’t sell well anyway. That explains the rumors about a cheaper, non-detachable version.

Surface Pro 4, however, is Microsoft’s best-selling Surface device ever. And if what my source told me is correct, in the sense that it results in a released product, then we have to explain why Microsoft would offer only a minor refresh. But that’s easy to explain.

There are two reasons. First, if and when Microsoft does switch to USB-C/Thunderbolt 3—and it should do so—it will want to make this change across the board. That is, it shouldn’t happen piecemeal. Both Surface Pro 4 and Surface Book should adopt this standard at the same time. Because a Surface Book 2 (or whatever) is further off, Surface Pro needs to wait as well.

Tied to that is a 2014 Microsoft pledge to businesses in which it committed to keeping Surface Pro peripherals compatible across subsequent generations of products.

“We understand that for businesses to invest in Surface Pro 3, they need clarity on our commitment to hardware and accessories over time, so they can responsibly manage their investment choices,” wrote Brian Hall, who was then the General Manager of Microsoft’s Surface business. “We are pleased to share that Surface Pro 3 accessories are designed with our product roadmap in mind and will be compatible with the next generation of the Pro line of Surface.”

Yes, this agreement covered Surface Pro 3 and Surface Pro 4. But it is common practice in the PC business for PC makers to maintain compatibility across multiple generations of business-focused products. Dell and HP have done this for years. And in fact, I commented on this recently in my HP EliteBook x360 G2 First Impressions article. “In a nod to its commercial customer overlords, the EliteBook x360 also has one foot in the past,” I wrote. “Instead of offering USB-C/Thunderbolt across the board, this device ships with a standard HP power port so business users can use their existing chargers. (Yes, you can charge over the single USB-C port as well, if you have the part.)”

That’s how it works. And since Surface Pro 4 is a big success with business, it actually makes sense that the firm would retain peripheral compatibility between Surface Pro 4 and the coming revision. All of your existing Type Covers, power adapters, and other peripherals will just work.

In late 2017 or perhaps early 2018, if Microsoft keeps to its new spring schedule, the firm can revise both Surface Pro and Surface Book to adopt new technologies. This will help at retail, too, since its stores won’t need to keep as many different power supplies and other hardware on hand to support customers.

As to the when bit—e.g. why Microsoft hasn’t already announced/released this new Surface Pro—one can only speculate. We know it was supposed to happen. So it makes sense that it will, in fact, happen soon enough. And that 26 percent revenues drop-off shows why managing the schedule is so critical. If Microsoft had released a Surface Pro 4.5 (or whatever), things could have been very different since Pro is its best-selling Surface.

Anyway, I don’t think it’s fair to accuse Microsoft of pulling a Nokia with Surface. After all, it’s a different leadership team, and a completely different product lineup and market. Windows phone was always doomed, folks. But Surface has a bright future, I think. And that’s true no matter the timing on the next revisions. And no matter what Microsoft announces next week.