Peter Nowak: The future of tablets strangely belongs to Microsoft

Tablet sales will rebound – and Microsoft is better positioned than Apple to take advantage.

A Surface Pro 4 'laplet' at the Microsoft store in New York last year. Its hybrid strategy is finally succeeding. Stephanie Keith / Bloomberg

The death of tablets has been greatly exaggerated and that's great news for … Microsoft?

It’s true, according to International Data Corporation. Worldwide tablet sales are expected to decline by 12 per cent to a total of 182.3 million shipments this year, but a rebound is coming over the next few years, the tracking company says.

Growth will be in the low single digits, but still – a rebound is a rebound.

Conventional wisdom has held that years of declining tablet sales, driven mostly by the availability of larger smartphones and lighter laptops, meant the category was doomed. But it looks like there’s life left in them yet, thanks mainly to convertible tablets.

Also known as laplets, these are devices that transform into something resembling a laptop once a keyboard is attached. IDC sees the subcategory spurring the overall category back into positive territory by 2018.

Leading the charge, surprisingly, is Microsoft. The company took much heat in 2012 when it introduced the Surface, a singular hybrid device that could let consumers replace both their laptops and tablets. Those original Surface devices were derided for being too heavy and expensive and for having a paucity of apps and battery life, at least compared to Apple’s iPad, the undisputed king of the market.

Four product generations later, it’s a bit of a different story. Surface tablets have improved in virtually all of those areas and can now be considered a hit, by some measures.

Microsoft said that in the quarter that ended on September 30, revenue for the Surface line, which also includes the more traditional Surface Book laptop, came in at nearly US$1 billion, which was up by 38 per cent from a year earlier.

The well-reviewed convertible Surface Pro 4, released in the summer, was responsible for a good portion of that. It is increasingly looking like Microsoft’s hybrid strategy is finally succeeding.

Hybrid gadgets typically force users to trade the performance they might get from multiple devices for the convenience of an all-in-one. Their success or failure usually rests on how wide that gap is. Early Surface tablets, which ran modified versions of full Windows software instead of a lighter mobile operating system such as iPads use, were capable of handling most desktop applications but they fell too short of proper computers or tablets.

The Surface Pro 4, on the other hand, has shrunk that gap to an acceptable level.

Apple, meanwhile, has dominated the tablet category with devices that smoothly run all manner of entertainment and media consumption apps but which historically haven't been well suited for productivity. They've been good for watching movies and looking at photos but they haven't been very good for getting work done.

The company tried to address that issue last year with the iPad Pro, which came with a more powerful processor and bigger screen and an optional attachable keyboard and Bluetooth stylus.

It hasn’t helped much. Sales continue to slip and the smaller, non-Pro versions still account for the majority of iPad units shipped. Productivity-minded users are still finding that Apple’s mobile iOS doesn’t suit their needs.

Microsoft, on the other hand, is benefiting for the same reasons that its original devices suffered. While the Surface wasn’t – and perhaps still isn’t – as good for casual media consumption as an iPad, the ability to run full Windows apps is turning out to be a big plus.

Surface Pro tablets will probably never be used for high-end productivity work such as video editing but many road warriors are finding them good enough. And “good enough” is all anyone can ask for from a hybrid product.

It is an unusual role reversal that was hard to see coming a few years ago but it’s par for the course given the directions Apple and Microsoft are going in.

The iPad maker’s recently unveiled Macbook laptops have been roundly panned for being underpowered, while Microsoft has received praise for its innovative Surface Studio, a large desktop PC that converts into a sort of digital drafting table.

Tablets used to be all about fun use but now that everyone has one, professionals are demanding more from them. Apple is giving people more of the same while Microsoft is doing its best to cater to their needs, which will drive the expected upward trajectory of tablets.

It’s yet another example of the cyclical nature of technology. What’s laughable one day may turn out to be the hot new thing the next.

The tech week’s winner and loser

Winner of the Week: Amazon. The online retailer unveiled plans for Amazon Go, a physical, sensor-laden store that lets shoppers grab groceries and leave without standing in line to pay. The company plans to open its first such store, in Seattle, to the public early next year.

Loser of the Week: Zero rating. The US Federal Communications Commission ruled that telecom provider AT&T is violating internet rules by exempting its TV content from subscribers' monthly usage caps, a process known as zero rating. Hungarian regulators ruled against Magyar Telekom for the same thing.

Peter Nowak is a veteran technology writer and the author of Humans 3.0: The Upgrading of the Species

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