Microsoft (MSFT) hasn’t seen the success it would like with its Surface tablets, but the company hasn’t given up. In fact, it’s pushing the latest iteration — the Surface Pro 3 — harder than ever.

This time, it’s not just shooting for the traditional stronghold of Windows and Office-using business types. Microsoft wants the Surface Pro 3 to be the mobile device of choice for creative professionals, too.

I was at the recent Microsoft Surface Cafe event in Toronto and had the opportunity to spend three hours putting the new MSFT tablet through its paces.

How did this newest (and biggest) Surface tablet fare? Is it the PC laptop replacement Microsoft is positioning it as? Is it really capable of replacing the Apple (AAPL) MacBook Air/iPad Air combo that MSFT is so blatantly gunning for?

Read my Microsoft Surface Pro 3 review to find out.

Microsoft Surface Pro 3 Review: Bigger, But Feels More Compact

In my previous encounters with Microsoft’s various Surface tablets, I’ve always been thrown by the 16:9 aspect ratio Microsoft chose. That made an already large tablet seem unwieldy. It was narrow and long, so when held in portrait mode (the natural position for one-handed use and reading), the experience was clumsy.

The Surface Pro 3 is the biggest Surface tablet yet, with a massive 12-inch display. Yet it felt far less awkward to hold, and a big part of that is the switch to a 3:2 aspect ratio.

Besides the improved experience in portrait mode, it’s just plain impressive what Microsoft has accomplished in stuffing an Intel (INTC) Core CPU into a tablet that’s just over a third of an inch thick.

The new pressure-sensitive Surface Pen is a nice addition too. It feels natural to hold, and attaches to the side of the tablet magnetically. Click the pen and you can automatically wake the  Surface Pro 3 for taking notes.

However, I found MSFT’s claims of next to no latency with the Surface pen a bit of an exaggeration, primarily because of lag introduced by an animated cursor that can’t be turned off. I spoke to a Microsoft engineer who said they’d received many complaints about that cursor and were considering a software fix — so that may cease to be an issue.

The display is big and bright, and the Core i5 Surface Pro 3 I used was a snappy performer, even with Adobe (ADBE) Photoshop.

Microsoft Surface Pro 3 Review: Expensive and Not Quite a Laptop

MSFT has made a big point of comparing the new Surface Pro 3 to the MacBook Air and iPad combo. Yes, carrying around the Surface Pro 3 means one fewer device. But it’s not going to save you much money — at least not if you want a version that has the horsepower to handle the demands of the creative/professional market Microsoft is pushing for.

The base Core i3 Surface Pro 3 with 64GB of storage isn’t going to cut it for heavy-duty use. Casual business use, sure, but getting serious work done means bumping up to at least the Core 15 version with 256GB of storage at $1,299 and spending another $130 or so on a Type Cover.

At that point, the savings over an 11-inch MacBook Air with extra storage plus an iPad Air amount to a few hundred dollars, at best.

Microsoft significantly improved the kickstand and the Type Cover for the Surface Pro 3. Together, they’re far more adjustable and much more stable than previous versions. I had to really put an effort into pulling an attached Type Cover off, and the kickstand seemed solid no matter what position it was in.

All of this was fantastic on a desktop. On the lap — not so much. The kickstand/Type Cover combo is still no match for the compact stability of the bottom half of a traditional notebook PC.

Bottom line: Getting the most out of the Surface Pro 3 means going all in with a Core i7 CPU, 8 GB of RAM, 512 GB of storage and the Type Cover. That sets you back more than $2,000, and PC makers like Hewlett-Packard (HPQ) will sell you a notebook with similar specs (but a much larger display) for half that price. The PC notebook will sit comfortably on your lap and unlike the Surface Pro 3, it can be easily upgraded later with additional RAM or more storage.

Microsoft Surface Pro 3 Review: Specs

Microsoft offers multiple versions of the Surface Pro 3, but I tested the Core i5 model.

• 12.1-inch Clear Type multitouch display at 2160 x 1440 resolution
• Intel Core 13, Core i5 or Core i7 CPU
• 4GB or 8GB RAM
• Storage SSD from 64 GB to 512 GB
• Wi-Fi 802.11a/b/g/n/ac, Bluetooth 4.0
• Built-in HD webcam, 5MP rear-facing camera
• Stereo speaker with Dolby enhanced sound
• USB 3.0, microSD slot, Mini DisplayPort
• Battery rated for up to 9 hours
• Surface Pen included
• Windows 8.1 installed
• 11.5 x 7.93 x 0.36-inches, 1.76 pounds
• Price ranges from $799 to $1949 (Type Cover not included)

Microsoft Surface Pro 3 Review: Conclusion

The Surface Pro 3 is an impressive tablet, and when combined with the improved Type Cover, Kickstand and Windows 8.1, the device makes for a capable and adaptable portable PC replacement. But I’m not ready to give up my MacBook Air and iPad just yet.

Despite the clever engineering, the Surface Pro 3 still doesn’t quite cut it as a “laptop” replacement. And MSFT’s continued insistence on charging extra for the Type Cover — an accessory it features in every Surface Pro 3 demo and one that’s needed if the device is to be an actual notebook replacement — remains annoying.

Microsoft is now offering a bundle that cuts $150 or so from a protective sleeve, Office 365 subscription and a Type Cover. That’s a start, but if it’s going to push the Surface Pro 3 as a laptop replacement, MSFT should just bite the bullet and include the keyboard.

It still has to do something about that significant price premium over a traditional PC laptop, especially now that many of them also support Windows 8.1’s touchscreen functionality. And on the tablet front, there’s still a big app numbers deficit to overcome compared to Apple or Google (GOOG) Play.

But if you’re willing to invest a substantial sum in a combo device that’s more than capable of handling demanding PC software, looks pretty interesting sitting on a desktop and does double duty as a premium over-sized tablet as well, the Microsoft Surface Pro 3 could be that device. The question MSFT watchers need to worry about is whether this market segment is as big as Microsoft hopes.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.