After Surface Book clash, Microsoft may attempt peace with partners

Microsoft, Intel, Dell, HP and Lenovo team up

Microsoft may be looking at thawing the ice given the cold reception PC partners showed the Surface Book. Even though consumers appear excited about Microsoft's first foray into the laptop space, OEM partners were less than pleased that Microsoft had encroached in the notebook space with an expansion of the Surface business.

"We're not happy about that," said Dell President of Enterprise Solutions Marius Haas in response to Surface Book. And despite Dell being a reseller of the Surface Pro 3, Haas said that his company has no plans on reselling the Surface Book in an interview with The Register.

Rival HP agreed, saying "that was a good answer," but conceded that the Surface Book may be a good product for the industry "as far as creating demand for $2,500 (£1,615, AU$3,3437) devices." Industry analysts forecast that the premium space will be dominated by Apple and Microsoft, leaving OEM partners to fight over the mainstream market with devices priced between $500 to $1,000 (£323-646, AU$687-1,374).

To make peace, Microsoft and Intel are said to be partnering with Dell, HP and Lenovo on a new advertising campaign. The focus of the campaign is to highlight the capabilities of a modern PC, a move that appears timed to capitalize on the recent debut of Intel's sixth generation Skylake processor and Microsoft's Windows 10 operating system.

An interesting partnership of frienemies

The ad campaign could be announced as early as Thursday, according to ReCode, with the slogan "PC does what?" The ads will span print, online and TV spots in the United States and China.

In the past, Intel and Microsoft have subsidized advertising campaigns run by a single PC manufacturer, but having a campaign highlight products from the world's largest PC manufacturers together is an interesting strategy.

While the campaign may show the products made by each individual manufacturer, it could also highlight the diversity of designs and form factors to bring attention to the broader industry, a move that would benefit both Intel and Microsoft.

Despite a 15% increase in selling price, Intel recently reported that CPU shipments declined by 19%, leading to a 6% year-over-year income drop in the third quarter. As the state of the PC market continues to decline, Intel may have a vested interest in the campaign to convince consumers to upgrade not just to Windows 10, but to new PC hardware.

Compared to a PC from five years ago, Skylake delivers 2.5 times faster compute performance, 30 times better graphics and three times the battery life, Intel Senior Vice President Kirk Skaugen claimed. Intel suggested that there are over half a billion PCs in the world that are more than five years old.

Just as important as performance is for consumers and business owners to upgrade, Intel is also claiming that its partners will unveil 300 new mobile designs, which includes tablets and laptops, as well as 200 new desktop designs. These systems are thinner, lighter and sleeker than PCs from fives year ago.

Microsoft-inspired

Microsoft not only kickstarted the business tablet market when it debuted the Surface Pro series, but the company's most recent Surface Pro 3 and Surface Pro 4 have inspired similar designs from its partners, including the Lenovo ideapad Miix 700, HP Spectre x2 and Dell XPS 12. Even Apple's iPad Pro drew inspiration from Surface Pro 3's large display, keyboard dock and pen and inking capabilities.

Surface Book

The Surface Book is a different story. Whereas the tablet market wasn't fully established when Microsoft introduced Surface Pro, laptops have traditionally been the domain of OEM partners. And it sounded like Microsoft may have thrown some of partners under the bus when it announced that "ounce for ounce, Surface Book is the best laptop ever made."

Despite Microsoft being more aggressive in the hardware space, Microsoft can't battle for the PC market alone. Surface Book appeals to a small percentage of users drawn to the ultra-premium PC space, and Microsoft still needs wares from Dell, HP and Lenovo at the entry-level and mid-range space. Lenovo's "Chromebook-killing" 11-inch ideapad 100s starts at just $199, for example.