Microsoft (NASDAQ: MSFT) announced the Surface Laptop on Tuesday at an event highlighting the company's latest products for the education market. Although the Surface Laptop runs a watered-down version of Windows 10 and is targeted at the education segment, don't expect it to stay that way: it's both way too powerful and way too expensive to be truly focused on the education market.
Rather, Microsoft is continuing to up the battle against Apple's Mac computers — and its own partners. But this time, it came at the fight from the side.
This ain't no Chromebook
Microsoft's messaging during the event was confusing at best. The company first seemed to be chasing after Google Chromebooks, the most popular computer currently in classrooms, by introducing a new version of its operating system called Windows 10 S.
The new operating system is easy to manage and allows users to install applications only from the Windows Store — the millions of legacy Windows apps that make Windows such a useful ecosystem are mostly not permitted. Users are also limited to using Microsoft's Edge browser by default.
Then it rolled the Surface Laptop -- a $999 computer that comes with similar hardware specifications as the latest MacBook, but with newer processors.
Most Chromebooks are in a completely different class. $200 to $400 gets you a decent machine for interacting with Google (NASDAQ: GOOGL)'s suite of products, like Gmail, Docs and, most recently, even Android apps, but you can't do much else. There's not usually much on board storage — the idea, in Google's world, is that you'll do most of your work in Google's cloud instead.
So what was Microsoft doing showing a powerful computer hobbled with an operating system that doesn't let you do very much?
Microsoft is really fighting Apple, not Google
Here's the trick: Consumers who buy the Surface Laptop can pay a one-time $49 upgrade fee to move from Windows 10 S to Windows 10 Pro. (That fee is going to be temporarily waived on devices priced $799 or higher, Microsoft told CNBC.) That upgrade allows users to use any browser they want and cuts down the walled-garden approach to apps, too, which means you can install anything outside of the Windows app store.
In other words, Microsoft almost seemed to be disguising this device, slipping it under the radar as an educational product, when it's really going to go right after Apple (NASDAQ: AAPL)'s Macbook.
The Surface Laptop is half the price of Microsoft's larger Surface Book laptop, which was first released in 2015. That machine is more targeted at stealing MacBook Pro users, which puts the Surface Laptop square against Apple's entry-level machines.
It has all the hardware to compete, much more than what's required in a classroom. It runs on Intel's powerful Core i5 or Core i7 processors. That's enough muscle to run Adobe Photoshop and demanding applications, unlike Chromebooks.
I think Microsoft's real target market here is students heading off to college. By positioning the Surface Laptop toward "education" it can attract a crowd that might otherwise be looking at MacBooks.
Which brings me to my final point. Save for Windows 10 S, which can be upgraded easily, the Surface Laptop looks like a perfect machine for business. Again, it has the hardware, it's attractive in its design, it's thin and light, and it offers ports that are still important, like USB and SD, which Apple has abandoned in its designs.
The Surface Laptop is too powerful and too attractive to remain an education play. It won't be long before this is targeted at consumers and businesses, too.
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