So PC sales are falling, big time, there's a shock. To protect its two cash cows (Windows and Office), Microsoft has jumped into the hardware market to try and guarantee it can expand onto devices other than the serves and workstations that have been its mainstay for the last 30 years.
By all accounts, it's not going well, with Surface sales poor, while Nokia is still struggling to make headway against Apple and Samsung (although sales of their Lumia range are improving). It's too early to tell how it'll pan out, Microsoft has a history of starting slow in new markets, but it has deep enough pockets to stick around to get it right.
So it was with interest I noted the potential launch of a smaller Surface tablet, 7- and/or 8-inch models are rumoured. Add to that the likelihood that Windows Phone is due to have 1080p output by the end of the year and you have some interesting specs to roll together.
Compared to their rivals, the Surface tablets feature quite a lot of connectivity options. Even the lowest model comes with a USB slot, a microSD expansion slot and an HD video out port. These are in addition to Bluetooth support.
That makes it very easy to connect an external mouse and keyboard. It's also possible to connect to an external monitor. Anyone who has used a tablet, even one of the bigger 9- or 10-inch ones, will have found the screen real estate limiting.
Using a simple micro-HDMI cable you can hook your Surface up to a monitor or TV and have a full HD (1920 x 1080) resolution display (both the RT and Pro variants can do this right now, and with the announcement that Windows Phone should support HD by the end of the year it's likely any smaller tablet will too).
What I'm getting at is that Microsoft is already positioning the Surface tablets as desktop/laptop replacements. Most user's processing requirements are fairly light. There's a reason chip and PC makers have stopped talking about speed: no one's interested. We reached the point where machines are fast enough long ago.
So what Microsoft is offering is a potential replacement for your home PC. You won't need to keep a desktop so the kids can complete their homework without going blind pecking at a tiny screen, or because it won't run the right application. Instead they can have a tablet and just hook it up to a screen, a full size keyboard and mouse and away they go, as productive as ever.
So why hasn't the Surface done better so far? Well one of my theories is price. The cheapest Microsoft tablet, the RT, starts at £399 (and has a 10.6-inch screen). Due to the Mini, the iPad starts at £269, £329 if you want a 9-inch version (the iPad 2). A Nexus 7 will set you back just £159, while its 10-inch big brother is £319. The Surface Pro, not yet out in the UK, looks likely to cost £700+.
Smaller tablet sales have been booming, I suspect, because of their lower price. Introducing a smaller model allows Microsoft to compete (assuming it's willing to take a hit on the Windows tax is adds). They also have a value proposition: the only computing device you need.
Owning a 7" tablet I can tell you I don't even attempt to multitask on it and I certainly don't write content (like this post) on it, it's too small, but what if I could hook it up to a monitor and a proper keyboard? It probably has all the computing power I need. Get the price low enough and instead of a typical family having one or two PCs, everyone will have their own.
As phones get faster, Windows Phone will start to take on the single device mantle (which is why Ubuntu is getting their OS onto phones), but in the meantime, Microsoft could grab both the home PC market and the business laptop market with a single tablet that does everything.