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How Does Microsoft Corporation Really Feel About Surface Pro 3?


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Long before the introduction of its cutting-edge, pseudo-tablet, Surface Pro 3, rumors swirled that new-ish Microsoft CEO Satya Nadella wasn't enamored with the notion of entering the hardware business. On the surface, Nadella's "mobile-first, cloud-first" mantra would seem to contradict his earlier non-hardware assertions, but his mobile-first focus isn't necessarily about building devices, it's about enabling mobile units with Microsoft's suite of systems and software.

It's said that Nadella eventually "saw the light" and has since embraced devices, but by then, the groundwork had been laid for Microsoft naysayers. The most recent example is the back-and-forth surrounding Microsoft's Surface Pro 3. By most accounts, the Surface Pro 3 enjoyed a successful launch. But you don't have to go far to find industry pundits who claim the complete opposite, even suggesting that Nadella's lack of support for Microsoft's tablet hybrid, along with poor sales, will mark the end of the Surface altogether.

Nadella's take on the Surface Pro 3
A recent statement issued by Microsoft Surface general manager Brian Hall should put an end to the questions regarding the future of the Surface Pro 3. Whether it actually does or not is another matter, but Hall's announcement makes it pretty clear: "We are here to stay." Hall went on to explain all the benefits of the Pro 3 to businesses, and he took a jab at one the company's longtime rivals and current king of tablets, Apple , saying Surface is perfect for employees that need a laptop, but "want to avoid having to buy and carry an iPad, too."

If Hall's statement that the Surface Pro 3 is "here to stay" wasn't enough to allay fears that Microsoft will cut the cord on its new form factor, a note issued by Nadella himself, included in the announcement, should.

Here's Nadella's take on the future of Surface:

We believe a strength of the Microsoft platform for enterprise is the rich ecosystem of hardware and applications developed by our partners, the community at large, and some of our own teams at Microsoft. In particular with Microsoft Surface Pro 3 we are now offering an enterprise-class device that can deliver great end user productivity. Microsoft is putting its full and sustained support behind the ongoing Surface program as one of a number of great hardware choices for businesses large and small.

That ends that discussion, right?

There's (at least) one in every crowd
Despite what was a clear indication that the Surface Pro 3 isn't going anywhere, you don't have to look far to find Microsoft naysayers. In fact, one report issued right around the time of Hall's and Nadella's announcement claims Microsoft will "terminate its Surface tablet line" altogether. How is that possible, particularly considering Nadella's recent statement? The "insight" comes from the now infamous upstream supply chain "sources" that are the basis of so many tech rumors.

The latest claims from the supply chain insiders also cite Surface Pro 3's less-than-expected sales since its roll-out, and even goes so far as to suggest Microsoft has suffered losses of $1.7 billion due to its poor adoption rates. The supposed losses Microsoft has endured are the result of selling less than 1 million Surface units, so says the report. Interesting that even as Microsoft is rumored to be killing off the Surface Pro 3, scuttlebutt abounds that its old nemesis Apple is rumored to be preparing the roll-out of its own larger screen, pseudo-tablet at a special event later this month. Interestingly, Apple's new device has been dubbed the iPad Pro.

Final Foolish thoughts
As is the case with any tech leader today, especially as it relates to mobile devices, there's never a shortage of rumors, pro and con. Will Microsoft's earnings call, scheduled for the 23rd of this month, shed any light on Surface Pro 3 unit sales? Unfortunately, if past calls are any indication, specific unit sales results aren't likely. But Microsoft investors should hope that the Pro 3 is here to stay, because the "laptop that can replace your tablet" opens the door to a whole, new market.

Apple's own product, if industry insiders are correct, could be partly responsible for the success of the Surface -- and explain the rumored iPad Pro. Word has it the iPhone 6 Plus, Apple's recently released phablet, is flying off the shelves. Industry pundits have long predicted the demise of the tablet, due in part to consumers moving to phablets, or larger-screen pseudo tablets like Microsoft Surface Pro 3. As for the future of Surface, Nadella's own statement makes it pretty clear: The Pro 3 is here to stay, which should be music to the ears of Microsoft investors.

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The article How Does Microsoft Corporation Really Feel About Surface Pro 3? originally appeared on Fool.com.

Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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