Surface: How Microsoft Can Fix It

NEW YORK ( TheStreet) -- Microsoft's ( MSFT) introduction of its Surface tablet raises some troubling questions. Yes, the Surface tablet also has some intriguing positive potential, but we really have to deal with the negatives first:

1. Timing

Why the hurry in announcing the product now? The ARM -- Nvidia ( NVDA) -- version of the Surface tablet will ship in the fall, presumably October, while the Intel ( INTC) version will ship three months thereafter -- presumably January.

What does Microsoft benefit from telling everyone about a product now, when the first version won't be available for three months, perhaps four? Apple ( AAPL) only does this if they are introducing a whole new category of product, such as the iPhone in 2007 and the iPad in 2010.

For existing product lines, Apple typically "ships today" or at least within the next two weeks.

As it stands, Microsoft now has tipped its hand to the competition, and will be losing some sales to people who will postpone their Windows purchases until the Fall. So one wonders why Microsoft didn't wait almost 90 days and host this event in early September instead.

2. Incomplete features and specifications

It appears that the Surface tablet doesn't have embedded cellular modem or GPS. This is a serious negative when compared to the iPad and several Android tablets, for example. When I'm walking down the street with the iPad, pecking away like the best of 'em meter maids, I would rather not have to rely on a separate portable WiFi hotspot in order to be connected.

Separate portable WiFi hotspots sound good in theory, but they have limited battery life, and the connection with a tablet tends to break often, leading to wasted time and frustration in attempting to re-connect. A separate portable WiFi hotspot can be economical if you have several devices that need connectivity, but it may not be worth the aggravation. The recent advent of shared data plans also start to threaten this price argument.

Microsoft also did not say what the expected battery life will be. Obviously they can be somewhat excused for holding off to a time closer to launch, but it seems suspicious. If they were comfortable about superior battery life, they would have at least made a conservative claim that still sounded impressive. Monday's relative silence on this point is not a good sign.

3. Business or pleasure?

This gets to the fundamental weakness about the Surface tablet. Is it primarily an entertainment device, such as the iPad -- or is it a hard-core business productivity device, such as almost any Windows laptop? Let me tell you why it's fair to ask that question:

Microsoft made a big deal out of the Surface having a full USB port, a built-in stand so you can have it tilted like a normal laptop, as well as two seemingly very elegant keyboards. These items all suggest that this Surface tablet is positioned to be your new hard-core business laptop replacement. Hey, it even runs Microsoft Office, of course, unlike -- cough, cough -- the iPad.

Here is where that "business class" argument falls apart: It's almost all about size, actually. Ask yourself what's the smallest laptop you want to use if you are using it all the time for work? The basic limitations here are (1) screen size and (2) keyboard size.

I find that anything smaller than an 11.6 inch display becomes a nightmare to use, even for relatively short periods of time; 12.1 inches are better. The Microsoft tablet is 10.6 inches. In other words, I could not even dream about using it to replace any laptop -- and I use regular Windows laptops, Apple MacBook laptops as well as Google Chromebook laptops. The screen being only 10.6 inches is a non-starter.

What about the keyboard? The new Microsoft keyboards that are made specifically for the Surface tablet may be very innovative, but they are limited by the size of the tablet, which is in turn decided by the 10.6 display. In other words, unless there is some other magic going on here, the keyboards would appear to be too small. This is the other non-starter for serious all-the-time professional work.

Bottom Line

What's the bottom line here? On the one hand, Microsoft is positioning the Surface tablet as a laptop replacement. On the other hand, I don't see that it can perform that laptop replacement trick. It's "almost" there, but . . . "almost" is not good enough.

Microsoft is left with a device that now has to fend against the iPad -- and the longest list of Android tablets -- in the entertainment-centric field. That's a tall order, and not in the Starbucks sense.

Considering this new Surface laptop, it immediately brings to mind what Apple CEO Tim Cook said on the last Apple earnings call, two months ago. He said that it was really hard to combine a productivity device such as a laptop, with an entertainment device such as a tablet. He said it was a little bit like trying to merge a fridge with a toaster. I appreciated the argument then, but with the launch of the Microsoft Surface I now appreciate his argument even more.

Advice for Microsoft

The Surface tablet appears to have a compelling industrial design, aesthetically speaking: The keyboards are innovative. The market is screaming for a tablet that can be a total productivity tool -- not just an excellent entertainment machine.

How can Microsoft fix this situation?

1. Make a version of the Surface tablet that has a 12.1 inch screen.

2. Make it thick enough to house a battery that will ensure a better battery life than the iPad. If the iPad is rated at nine hours on any given test, make sure yours is at least 12 hours, preferably 18.

3. Make sure it has embedded LTE and HSPA cellular connectivity, as well as GPS. Offer it with a la carte (i.e., no contracts or automatic subscriptions) service options similar to iPad or Google/Samsung Chromebooks.

If Microsoft follows my advice here, it will accomplish what it set out to do with the Surface tablet: Create a business-grade tablet that goes where the iPad doesn't.

In the meantime, Apple and Google ( GOOG) appear to have dodged a bullet, and Nvidia got a design win.

Nvidia, by the way, has now managed to win this Summer's consumer computing trifecta: (1) Last week, it won the Apple MacBook Pro design win, (2) this week is took the lead in Microsoft's ARM tablet business ahead of Qualcomm ( QCOM) and Texas Instruments ( TXN) , and (3) Next week it is rumored to win the newest Google tablet, according to numerous reports published on the major tech blogs over the last month.

At the time of submitting this article, the author was long AAPL, GOOG, NVDA, MSFT and QCOM.