Microsoft’s Surface hardware is in a weird place exiting 2023. The mix of laptops, 2-in-1s, and desktop computers had a good 2022 — the Surface Pro 9 was arguably the ideal version of its flagship device — but 2023 saw not only no new Surface Pro, but a focus on half-hearted updates to Microsoft’s “affordable” Surface Go and Surface Laptop Go lines and the pricier Surface Laptop Studio. Rather than try anything exciting like a new form factor or the custom silicon chips Apple is exploring, Microsoft played it safe — really safe.
Mix in serious spending on OpenAI, and an intense focus on integrating the Copilot AI assistant across Windows 11, Bing, Edge, and Microsoft 365’s suite of productivity apps, and it’s becoming harder to see where first-party hardware fits in the overall Microsoft strategy. (Taking a loss on Xbox consoles to sell Game Pass subscriptions is a whole different story).
Microsoft’s attention is firmly set on selling its vision of artificial intelligence, and while that might help the future of Windows PCs look bright, Surface hardware might not survive without a serious reimagining.
Radical ideas
The whole idea of a Surface started as a real long shot. The launch versions of the 2-in-1 Surface and Surface RT were built to sell the radical redesign of Windows 8. Their mixture of touchscreen tablet with a kickstand, stylus, and detachable laptop-style keyboard might have been well constructed, but they were far from perfect. It took multiple years of hardware iterations and Microsoft giving up on some of the wilder ideas of Windows 8 — for example, the Live Tiles and emphasis on touchscreen interactions — before the Surface Pro really clicked, and Surface hardware didn’t become truly popular until the launch of the more approachable Surface Laptop in 2017.
Even if traditional laptops became Microsoft’s bread-and-butter, it never quite gave up on novel form factors. The Surface Pro was eventually followed by the Surface Book, a creator-focused laptop with an odd flexible hinge and gigantic detachable touchscreen; the Surface Studio, an easel-like all-in-one desktop with a unique dial accessory; and the Surface Laptop Studio, the company’s desktop form factor repackaged into a laptop.
Microsoft’s attention is firmly set on selling its vision of artificial intelligence.
Very few of those ideas have stuck around, however. The Surface Laptop Studio replaced the Surface Book, the Surface Studio was barely updated in 2022, and Microsoft has all but abandoned its dual-screen Surface Duo Android phone after two generations. Meanwhile, the Surface Neo, a larger dual-screen device that was supposed to run “Windows 10X” and realize the dream of “The Courier,” was quietly canceled.
Crisis of leadership
We might be able to pin the changing priorities on a rift between Microsoft’s consumer products teams (officially, Windows + Devices) and the company at large. A rift that appeared to come to a head with former chief product officer Panos Panay’s sudden exit from Microsoft in September. Panay not only oversaw the launch of the entire Surface family and Windows 11, but was the public face of the company’s hardware efforts, after years of Microsoft being known as a software and cloud infrastructure provider with multiple failed mobile operating systems. He was without a doubt a huge part of what made Surface unique.
But based on reporting from Business Insider, his hands were increasingly tied as Microsoft’s interests and investments changed. In response to Surface hardware sales that didn’t meet projections, Microsoft “made significant cuts to simplify the Surface business”, canceling products and refocusing on the more familiar devices that made the brand popular, rather than experimental hardware like the Duo or Neo that Panay was interested in. Microsoft was also increasingly intent on pursuing artificial intelligence both through billions of dollars of investments in OpenAI, and plans to integrate the startup’s AI models across its products, which likely left less financial “patience” for unique Surface hardware that wasn’t selling.
Panay ultimately left for Amazon to replace the company’s senior vice president of Amazon Devices & Services, Dave Limp. The Windows + Device teams now report to multiple different executives at Microsoft, including Yusuf Mehdi, the company’s consumer marketing head, who’s the new public face of Surface hardware. Even if the Surface brand isn’t going away, it’s clear the last year at Microsoft was a pivot away from visionary hardware to something more expected. If I had to guess, more laptops.
Missed opportunities
It’s a shame because there’s never been a better time to build hardware. I’ve covered the boom in handheld game consoles, including handheld PCs, and the opportunity Microsoft could have if it put out a dedicated Surface or Xbox-branded handheld. But so far, the closest Microsoft has come to seizing on that is some tweets from Xbox CEO Phil Spencer saying the company is interested in supporting PC handhelds and that there’s “more to do.” And in terms of actual products, the Windows Xbox app now has a compact mode that makes it display better on smaller screens like the Asus ROG Ally. Not exactly inspiring stuff.
It’s a shame because there’s never been a better time to build hardware.
Microsoft’s hardware ambitions have diminished as its AI prowess has grown, but there’s no reason the two couldn’t have a symbiotic relationship. In the near term, that might look like custom chips in Surface devices, like the Azure Maia chip the company created for its cloud business, but designed for consumer use cases. But considering Microsoft remains interested in creating an entry-level Chromebook competitor, why not do a lightweight Windows laptop that makes Copilot the centerpiece of the experience or hell, even a dedicated AI wearable like the Humane Ai Pin? Surface hardware could be a better introduction to AI and communicate why it's essential far better than a yearly Windows update.
My point is, the Surface brand needs a rethink. Microsoft will keep making money selling laptops, but a major benefit of its experimental hardware development was that its breakthroughs could be shared with other Windows laptop makers. Without that, Surface becomes boring, and the whole Windows ecosystem might end up suffering.
