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Is Apple trying to win Microsoft Surface Pro customers?

Two weeks after launching an iPad ‘Maxi' with 128GB of internal storage, Apple has upped the specifications and lowered the prices across its notebook range including the MacBook Air.

business Updated: Feb 14, 2013 12:24 IST

Two weeks after launching an iPad ‘Maxi' with 128GB of internal storage, Apple has upped the specifications and lowered the prices across its notebook range including the MacBook Air.

The move could well win business from consumers who had been considering a Surface Pro, the Microsoft notebook/tablet hybrid that launched on February 9 and has mysteriously sold out, prompting many questions about supply chain and expectations.

As part of its marketing campaign leading up to its North American launch, Microsoft went to great lengths to compare its Pro tablet with Apple's MacBook Air, rather than the iPad, to highlight the Surface Pro's processing power and performance credentials.

As Principal Analyst at Reticle Research, Ross Rubin, noted via Twitter: "Microsoft argues that, with Surface Pro, you don't need a MacBook Air. In tech marketing, this is known as the Surface-to-Air missile."

But the problem now is that five days on, the Surface Pro is no longer available anywhere and Apple now has two readily available products on the market ideally positioned to take full advantage of this supply-and-demand shortfall.

Wednesday, in what could be described as a Surface-to-Air-to-Surface missile attack, Apple announced that its 13-inch MacBook Air will now cost $1399 (instead of $1499) and that it will come as standard with a 1.8GHz dual-core Intel Core i5 processor, 4GB of RAM and a 265GB flash hard drive. And while it is still more expensive than a 128GB Surface Pro (which retails for $999), it is lighter, more powerful, has a longer battery life, twice as much internal storage and is already established as an ultrabook. What's more, unlike the Surface Pro, it comes with a keyboard as standard rather than as a $130 option. Consumers are in no doubt as to what type of device it is or into what computing category it fits.

And one of the principal reasons for this clarity is the strength of Apple's global retail store chain, something that Microsoft currently lacks. During his keynote speech and subsequent interviews at the Goldman Sachs Technology and Internet Conference on Tuesday, Apple CEO, Tim Cook, underlined the crucial role that physical retail space still plays in selling high-tech products and in educating potential customers as to a device's features. "One of the things that's not understood that well about the stores is that I don't think we would have been nearly as successful in the iPad as an example if it weren't for our stores," said Cook. Without being able to test drive an iPad and speak to Apple staff, potential customers would still believe that a tablet is "a heavy thing that no one wanted," he explained.

In recent months, Microsoft has been experiencing this problem firsthand. Although available globally via its own website, sales for Microsoft's first tablet, the Surface RT, have been sluggish since it launched in November. The latest figures suggest it has sold less than 1 million to date and one reason for this lack of performance is because potential buyers outside of the US at least have had nowhere to go where they can see the product up close, test its features and talk to a knowledgeable member of staff about whether or not it is the device that best suits their needs. As a result, Microsoft has been reduced to using ‘old-fashioned' marketing ploys to promote the latest edition to its tablet family. As USA Today's Anthony Shields notes about this weekend's launch of the Surface Pro: "Telling people that a product is short in supply and high in demand is probably on page one of the big book of retail tricks. Hearing that demand has far exceeded supply usually piques the interest of those consumers who are on the fence about buying a product, prompting sales."

This also explains why Microsoft is aggressively pursuing a strategy of retail expansion. It is opening another five stores in the US this summer and according to the Financial Times may be looking to open a store in the UK this year.