Microsoft Corporation (NASDAQ:MSFT) continues to challenge Apple Inc. (NASDAQ:AAPL) in the premium laptop market with the release of the new Surface Book 2 laptop. Microsoft has the MacBook Pro in its sights, and it isn’t being subtle about trying to win over creative and professional users from the Mac camp.
With Surface revenue down for 2017 and reports of slow Surface Book sales since the original launched, will Microsoft’s new flagship laptop have what it takes to help boost MSFT stock this time around?
Microsoft Announces the New Surface Book 2
On Oct. 17, Microsoft announced the new Surface Book 2.
The followup to the 2015 original continues to be a 2-in-1 device that converts between a traditional laptop form factor and a tablet, thanks to an innovative Dynamic Fulcrum hinge. MSFT decided not to mess with the design too much, but it did expand the lineup to include two models: one with a 13.5-inch display (the original size) and a new 15-inch version.
If that sounds familiar, it should. Microsoft was already clearly targeting Apple’s MacBook Pro with the Surface Book and with the Surface Book 2, it goes as far as matching the two MacBook Pro size options.
If it wasn’t already obvious who the Surface Book 2 is gunning for, on the company’s blog, it claims the Surface Book 2 is “twice as powerful as the latest MacBook Pro” with “70% more” battery life, and that the 15-inch laptop offers “45% more” pixels than the 15-inch MacBook Pro.
Microsoft has never been subtle.
The performance gains on the Surface Book 2 compared to the original are courtesy of 8th generation Intel Corporation (NASDAQ:INTC) Core CPUs, which offer a bigger than expected performance boost.
Most models of the new laptop also include graphics cards from Nvidia Corporation (NASDAQ:NVDA) for VR, PC gaming and advanced video editing support. And unlike Apple’s laptops, the Surface Book 2 offers USB-C connectivity, but it also includes a traditional USB 3.1 port, so no dongles are needed for connecting legacy peripherals and accessories.
Like the original, the Surface Book 2 has the advantage of tablet mode, and touch/stylus support –capabilities the MacBook Pro has never offered.
Those Early Rumors Couldn’t Have Been More Wrong …
The Surface Book 2 is a lesson about how those early supplier leaks can sometimes be very, very wrong. In March, we reported on a DigiTimes report that claimed the Surface Book 2 would ditch the removable display and arrive as a traditional laptop. It would also cost much less than the original.
Turns out that report was actually pointing to the $999 Surface Laptop, announced in May. The Surface Book 2 remains a convertible laptop and with a price ranging from $1,499 to $3,299 — it definitely did not get any cheaper.
Improved Surface Book Sales Could Help MSFT Stock
Surface Book sales have reportedly been disappointing — as few has 500,000 in 2016. And the laptop was plagued with higher than average return rates. That poor performance translated into several quarters this year where overall Surface revenue declined, making hardware a drag on MSFT stock instead of providing the hoped-for boost.
Apple has also found the PC market tougher slogging than usual since releasing its new MacBook Pro and it no longer seems invincible in the premium laptop space. This may be the opening Microsoft needs.
Microsoft may not have had much luck yet in knocking the MacBook Pro out of its position as the laptop of choice for creative professionals. But the company is hoping the Surface Book 2 has what it takes for its flagship laptop to lead the Surface lineup to increased sales and a corresponding boost to MSFT stock. Surface Book 2 is available for pre-order starting Nov. 9.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.