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Is Microsoft's Hardware Retrenchment Going To Claim The Surface Line Next?

Microsoft has signaled the end for the Surface 3, informing prospective customers that manufacturing is coming to an end shortly. With no replacement in sight this would indicate that Microsoft is on its way out of the consumer hybrid hardware arena.

The Surface 3 is the third most popular Surface in existence, which is an impressive performance considering its high price against comparable entry-level or consumer devices. That many outlets have the device in constrained supply suggests that demand is not leveling off either. So surely that means a replacement is on its way? 

Not necessarily.

The Surface 3's Cherry Trail processor hasn't been updated since the Surface 3 came out, so there isn't a logical upgrade path. Microsoft could switch to a different processor family, but would be unlikely to be able to do so and retain its current price point. 

So why kill the Surface 3? Clearly there are a number of reasons why Microsoft may choose to do this. Firstly, its reason for getting into hardware was to deliver a quality Windows experience where OEM partners were failing to do so. The Surface 3 now has a wide range of very capable competitors, so this may be a sign of Microsoft making good on its promise to not compete with its partners.

Also Microsoft may have decided that, like it Lumia business, the non-Pro Surface is competing in a segment where Microsoft doesn't want to be. 

Or it may be a harbinger of Microsoft's exit from the PC hardware business completely, something that is consistent with the Nadella 'cloud first, mobile first' strategy.

Microsoft may be intending to be return to being the software business it always was. Unthinkable given the efforts Microsoft have made around Surface and Xbox, but consistent with the bloodbath that was once the Nokia mobile division.

Failure to replace the Surface 3 would be very suggestive of the next stage in the revolution at Microsoft.


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