Report: Microsoft's Nadella, Elop Nixed 'Surface Mini' Debut After Deciding It's A Me-Too Product


Microsoft, which was rumored to be debuting a smaller version of Surface earlier this week, decided not to unveil the device because top executives decided it was too similar to other vendors' tablets, Bloomberg reported Tuesday.

According to Bloomberg, Microsoft CEO Satya Nadella and Executive Vice President Stephen Elop made the call not to unveil the smaller Surface, which would be Microsoft's first to use Qualcomm processors, at the event in New York where Surface 3 made its public debut on Tuesday.

The smaller Surface, sometimes called "Surface Mini," would join Apple's iPad mini and a slew of other 7-inch Windows tablets currently on the market.

[Related: Microsoft Adds Amazon To List Of Companies It Doesn't Want Showing Up At Partner Conference]

Given the lackluster sales Microsoft has seen so far with Surface -- Nomura Securities estimated recently that Microsoft has racked up operating losses of around $2 billion so far -- Nadella may have decided to stem the bleeding by pulling the plug on the Surface Mini unveiling.

If that’s the case, Hal Berenson, a retired Microsoft distinguished engineer and general manager, thinks Nadella deserves credit.

In Microsoft's third-quarter earnings call last month, Nadella said Microsoft would exhibit "courage in the face of reality," which could mean he's willing to shed products that don't sell or which don't fit with his mobile-first, cloud-first mantra.

Last April, The Wall Street Journal reported that Microsoft hadn't planned to make a Surface Mini but changed its mind after seeing the success of smaller tablets like Google's Nexus 7 and Amazon's Kindle Fire.

Microsoft may have slowed its roll with Surface Mini because the tablet market in general appears to be cooling off amid signs of saturation, Microsoft partners told CRN.

According to figures from IDC earlier this month, worldwide shipments of tablets and "2-in-1" devices fell to 50.4 million units in the first calendar quarter, down 35.7 percent from the holiday quarter and representing growth of just under 4 percent year-over-year.

Panos Panay, Microsoft's corporate vice president for Surface Computing, told Bloomberg that Microsoft is continuing to work on smaller versions of Surface, though he didn't say whether these would ever come to fruition as products.

In the meantime, if the tablet market continues to cool, Nadella could face more tough decisions ahead on Surface -- and not just the smaller version.

PUBLISHED MAY 21, 2014