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Apple $799 iPad Pro Faces Competition from $499 Microsoft Surface 3

With Microsoft’s Surface tablets generating about $3.6 billion in revenue over the last year, Apple introduced the iPad Pro to protect their iPad franchise where sales fell to the lowest level since 2011. Although Apple’s “Pro” comes with a Surface-like detachable keyboard and stylus, its short comings may limit its popularity with the creative crowd.

Microsoft Surface ultra-tablet family “has in the past three years quietly become a credible competitor to most other Windows laptops, while being one of the most portable fully capable personal computers, According to the Wall Street Journal.

Apple’s iPad sales peaked in the first quarter of 2014 at 26.04 million and plunged back to an estimated 10.93 million for the quarter ending this month. Virtually unreported, one of the biggest threats to what had been a cash cow for Apple.

One of the biggest threat to Apple is the new reseller deal for the Microsoft’s Surface with Dell and Hewlett-Packard to off-set the threat of IBM (NYSE:IBM) assisting Apple marketing the iPad Pro to business users. Most analysts view Dell and HP’s combined global enterprise presence as at least as big as IBM’s.

For the corporate environment, the entry-level $499 Surface 3 from Microsoft as tool for productivity than the $799 iPad Pro from Apple, even though the Surface comes with a 10.8-inch display and the iPad Pro comes with a brighter 12.9 inches display. The killer difference is that iPad Pro cannot run creative industry standard software.

According to Alcaraz Equity Research, Apple’s decided to equip the iPad Pro with a much more expensive ARM-based processor “is a blessing for Microsoft. The Surface 3 is powered by a much less expensive but very capable $35 Atom x7-Z8700 processor that runs most PC games at acceptable frame rates.

Besides being able to run full versions of Microsoft Office 2013 and Quicken, the basic $499 Surface 3 model comes with a larger 64 gigabytes of internal storage, the Surface 3 is also capable of running the image editing and vector illustration programs such as Photoshop CC, Illustrator CC, Autodesk SketchBook Pro, and Mischief. The “3” also has a full size USB 3.0 port, and microSD card slot for expanded data storage.

The basic $799 iPad Pro will not be able to run any of this business standard software; while featuring only 32 gigabytes of internal storage and no USB/microSD ports. The “Pro” will also not run Logic Pro X, Final Cut Pro, and Quicken 2015, which are the top three revenue producing software on the Mac app store.

Just to make another point of contention, the Microsoft stylus for the Surface 3 is only for $50, whereas the hyped iPad Pro “Pencil” costs $99.

Alcaraz argues, “The good performance and portability of the Surface 3 also makes it ideal for wider adoption in the business, educational, and creative markets.”

The A9X SoC processor in the iPad Pro “boasts a GeekBench single-core score of 2090 and multi-core score of 5101”, which is much more powerful than the Surface 3’s Atom x7-Z8700. Although Apple has some decent iPad drawings apps, they have never been as useful as native x 86 graphics software like Adobe’s Creative Cloud.

Volume purchasers of iPad Pros for the educational and corporate enterprise market will have to spend additional funds for Virtual Desktop Infrastructure from VMWare.

The ARM-based iPad Pro can only serve as an optional companion tool, rather than a replacement, for design professionals currently using Mac desktops. With the more capable Surface 3 selling at about a 40 percent discount, the marketing directors for the iPad Pro better be very good at touting Apple as a luxury status brand.

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