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Why Microsoft Surface needs a Mini Me

Stocks in this article: AAPLINTLMSFT

By Chris Lau for Kapitall.

Microsoft ( MSFT ), through its Surface Pro 3, continued to push forward its innovation in the ultraportable computing market. What the company is missing in its line-up is a Mini version of the Pro. The Pro 3 device should find a strong fan base, made up mainly of power users, but the computer technology giant needs to offer something that would fit the mainstream. Size, price, and power all need to resonate with consumers. A Mini Pro would fit that bill.

Surface 3 Pro

The Microsoft Surface 3 Pro is much lighter and thinner than its predecessor. With its magnesium casing, Microsoft has a tablet that should compete well against Apple’s ( AAPL) MacBook Air and Pro laptops. The resolution is 2160 x 1440 and the high-end model runs on an Intel ( INTC) i7 chip. i3 and i5 chips are also available, but the chips are the thinnest Intel has ever made.

Microsoft’s challenge with the Surface 3 Pro is that it is a high-end device that will appeal only to power users and professionals. To promote Windows 8.1 and boost market share, Microsoft needs a scaled down version of the device.

Ideal Specs for a Mini Surface

Ideally, The Mini at a smaller size could be marketed as an electronic notepad for students. The smaller screen size in the 8 or 9 inch range would be lighter and easier to carry. It would also cost less. This would appeal to a wider audience, from budget conscious students to consumers looking for a mainstream product.

Acting like a reference design, the Mini Pro 3 would guide other manufacturers in designing hardware that complements Windows 8.1. Microsoft would benefit immensely from a growth in tablets that run Windows 8.1. The software giant is doing what it can to promote Windows 8.1 on low-end devices. To wit, it is giving Windows for free for these devices.

Hardware sales will be a less important profit driver for Microsoft. Sales of its operating software will matter most to its profitability. If Microsoft finds the sweet spot for boosting Surface Pro sales, investors will be rewarded with a higher share price.

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