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Enterprise becomes the next tablet frontier as Apple and Microsoft eye productivity

Surface Pro 3

Apple and Microsoft's tablet ambitions have taken on diverging paths. While the iPad is still the reigning tablet leader, Apple revealed sales of its tablets continue to decline in an earnings call late Tuesday. On the other hand, Microsoft touts a growing Surface business in financial numbers released on the same day.

With sales at stake, productivity may be a key feature that Microsoft and Apple will target with their tablet plans. The numbers released are in line with analysts' forecasts for the state of the tablet market, but they also add color ahead of some anticipated and important product announcements.

Microsoft will release a major upgrade to its Windows operating system on July 29, and the company is rumored to unveil its Surface Pro 4 flagship later this year. Apple will follow in the fall with the debut of its iOS 9 operating system. There is also heavy anticipation for an iPad Pro tablet that will appease business users with a larger 12.9-inch display and rumored support for an active digitizing pen.

The earnings

Microsoft revealed that Surface sales increased by 117%. The Microsoft-branded tablet business brought in $888 million for the quarter. If this momentum sustains, Surface represents a $3.5 billion annual business for Microsoft.

Surface Pro 3

Microsoft's Surface line currently consists of the Windows 8.1-powered Surface 3 and Surface Pro 3. Users will be able to upgrade both tablets to Windows 10 for free if they act within the first year of the operating system's release. An LTE version of the Surface 3 will be available this Friday, and Microsoft is also expanding the Surface business to include the new Surface Hub.

On the other hand, Apple's tablet sales shrank by 18%. Apple CEO Tim Cook and CFO Luca Maestri reported that 10.9 million iPads were sold in the most recently ended quarter. Revenue for the iPad is down 23% compared to the same quarter last year. Conversely, Apple's Mac business is growing, with sales up 9%.

iPad mini 3

Apple's most current tablet models include the iPad mini 3 and iPad Air 2. The company continues to sell the original iPad Air and older iPad mini 2 at a lower price.

Despite the decline in iPad adoption, CEO Tim Cook said he is still bullish about the tablet market, noting that the experience is "unbelievably great." Cook points out that the iPad will get better with new features this fall, such as simultaneous multitasking capabilities and picture-in-picture video viewing.

Is productivity the killer tablet app?

Productivity may be the biggest battleground for the tablet market in 2015. Apple announced during its WWDC 2015 keynote that iOS 9 will bring more productivity features to the iPad, including better support for Bluetooth keyboards, keyboard shortcuts, a new QuickType keyboard for easy text selection and multitasking windows.

Microsoft announced that as a part of Windows 10, tablets, like the Surface 3 and Surface Pro 3, will gain more multitasking options through Snap. A new feature called Continuum allows tablet owners to connect a keyboard, for example, and have the user interface change to a desktop experience. Remove the keyboard, and the UI adapts with bigger icons for finger-friendly touch input.

Apps, which traditionally played a large part in device adoption, may become less significant. Standardized technology like HTML 5, better browsers, more robust internet connectivity and larger screens mean that tablet owners need to rely less on apps.

Take Google Docs and Microsoft Office 365, for example. Even though you can download Google Docs, Google Sheets, Google Slides, Microsoft Word, Microsoft Excel and Microsoft PowerPoint as apps onto your tablets, you can also easily work within the browser.

On tablets with larger screens, the focus is more similar to the desktop, and users are more concerned about performing tasks simultaneously. This means doing research in the browser while working in a Word document at the same time.