-- for all of the criticisms it takes -- is one of the
world's most profitable technology companies, having generated a
cool $22 billion in net income in its most recent fiscal year.
Generally speaking, companies that generate that kind of
monstrous cash flow have to be doing something right (and
Microsoft does plenty right). However, one of the most
controversial -- and costly -- moves Microsoft has made in recent
years is try to compete directly in the tablet market with its
Surface line of products.
Its first Surface, known as Surface RT, sold so poorly that
Microsoft needed to take a $900 million inventory writedown on
unsold Surface RT tablets. The follow on to the original Surface
RT -- dubbed the Surface 2 -- didn't seem to do all that well
either despite significant improvements over the prior generation
model, likely hindered by the fact that it couldn't run most full
Windows 8.1 applications.
However, that could all change with the next-generation
Surface Pro 3 isn't quite there
Microsoft's recently launched Surface Pro 3 contains an
Core processor and runs full Windows 8.1, so -- for some users --
it lives up to Microsoft's marketing message that the Surface Pro
3 can replace a traditional laptop.
However, as a tablet, the Surface Pro 3 appears to leave a lot
to be desired: It's too large, contains a fan, and is quite
expensive in a tablet market that increasingly favors lower
costs. However, if Microsoft were to make a Surface 2-like device
that could also act as a full Windows 8.1 laptop, and if it were
priced at Surface 2 levels, there could be a very real value
In short, Microsoft could finally realize its vision for
Surface 3, powered by an Intel Cherry Trail Atom, could
be a game-changer
Take the Surface 2, give it the ability to run full Windows 8.1
applications with ease, price it at the $449 level that the
Surface 2 comes in at today, and this actually becomes a solid
value proposition for users seeking an inexpensive laptop
How can Microsoft do this? Two words: Cherry Trail.
Intel has been very aggressive in driving its Atom processor
family for tablets, and it's planning to launch its
third-generation Atom for Windows tablets -- codenamed
-- by the end of this year for a first half of 2015 ramp.
The current-generation Atom -- known as Bay Trail -- offers
pretty good processor performance, but it struggles in
graphically intensive workloads (i.e., games). Cherry Trail is
set to be a significant step up in graphics capability, and leaks
suggest a roughly four-times improvement over Bay Trail, which
should make it capable of playing many modern PC games.
Add to that the ability to run all pre-existing Windows
applications, including Photoshop, Office, iTunes, and countless
other applications, and Microsoft begins to have a highly
functional, fairly affordable offering.
Pretty neat, right?
Foolish bottom line
Microsoft really made a mistake in trying to push Windows RT as
compatibility with the vast library of pre-existing Windows
applications is -- as far as Microsoft's consumer presence goes
-- its crown jewel. If Microsoft decides to adopt Intel's
upcoming Cherry Trail Atom processor for its next-generation
Surface product (assuming, of course, Microsoft even continues
the line), then this would be a fundamental game-changer for
Surface as the product line would finally offer the best of both
worlds: functionality and affordability.
More from The Motley Fool:
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Microsoft's Next Surface Tablet Could Be a
originally appeared on Fool.com.
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