In July, Microsoft announced a $900 million write-down on excess
inventory of its first generation Surface devices and slashed the
price of its low-end Surface RT. In August,
Microsoft switched Surface's digital consumer marketing to
Publicis Groupe's Razorfish from Interpublic Group of Cos.'
Microsoft plans to go after more well-defined consumer segments
with the new line.
Ms. Seiler said Surface is ideal for creative professionals like
filmmakers and video-game designers, corporate professionals and
"Surface is a productivity tablet, not an entertainment tablet,"
Ms. Seiler said.
Analysts attending the product unveiling said they expect the
updated line to do better, especially at the enterprise level,
after Microsoft addressed major shortcomings such as poor battery
life. Microsoft corporate VP Panos Panay said at the launch event
that the Surface 2 line had a battery life two and half times that
of its predecessor.
"The biggest complaint about the Surface was battery life," IDC
analyst Crawford Del Prete said. "When it comes to selling to
enterprises, battery life is a nonstarter."
Mr. Del Prete said this improvement and Microsoft offering free
international Skype calling to all Surface 2 and Surface Pro 2
customers will make the product more appealing.
Forrester analyst Frank Gillett said the original Surface
confused consumers because it was positioned as a PC-like device
and had a
dearth of apps relative to other tablets.
"Surface was neither a fully-flexible Windows PC nor a tablet
with all the apps," he said.
The second generation of devices, available for pre-order on
Tuesday and widely available Oct. 22, will launch with 10,000 apps,
Mr. Panay said. A Facebook app, which was noticeably absent from
the first Surface, is currently being developed, he added.
Microsoft's challenge is to keep growing its app ecosystem and
improve how its software operates across devices.
Ms. Seiler said marketing the Surface will gradually become less
about the product and more about Microsoft as a whole.
The first year was about establishing Surface as a brand, she
said. "We still have work to do. We're not even a year in yet."