The first set of Surface tablets -- the RT and the Pro -- was slow to sell, so much so that Microsoft was forced to take a $900-million charge over the summer due to unsold inventory. Later, the company also cut the price of both products.
The Surface was supposed to be Microsoft's answer to the Apple iPad, but despite clever ads that showed off some of the Surface's superior features, Apple still has a dominant grip on the tablet market.
But Panos Panay, corporate vice president of Microsoft and the creator of the Surface tablet, said the company was staying the course. He said he believes customers who want to use their tablets to get real work done will see the benefits of the Surface.
"If the team stays focused and the people believe in what they're building, I think you're going to see that in the products," Panay told The Times during an interview at the Microsoft Store at the Westfield Century City mall in Los Angeles. "It comes down to this: if you're making great products, people will buy them."
Panay said it was important for Microsoft to stick to its brand and focus on users who "want to be able to get more done."
"If that's not your primary goal and it's about watching movies or playing games and only that, that's a great thing. And people can select the best device for that," Panay said. "But if your goal is to get more done, and we stuck with that, the promise of this product brings that truth to life."
Microsoft will release the second generation of the tablets -- the Surface 2 and the Surface 2 Pro -- on Oct. 22, and they are already available for preorder online. As with all tech gadgets, the new Microsoft tablets are faster, thinner and lighter, but Microsoft has also improved the products in other areas.
The upcoming gadgets feature higher-resolution screens than before, while their glare has been reduced to some of the lowest levels in the industry, according to Microsoft. Additionally, the Surface's kickstand now has a second viewing angle that makes it easier to set on the lap and for use by tall people. And there is now a silver color option as well.
But perhaps more importantly, Microsoft has beefed up the battery life on both versions of its tablet, fixing the chief complaint about the first generation of the Surface. The Surface 2 has 25% more battery life than its predecessor and now lasts 10 hours -- the same as an iPad -- while the Surface 2 Pro received a 75% increase in battery life. Microsoft did not say how long the battery lasts on the Surface 2 Pro.
"Both products had a significant focus in making sure if people were going to be productive, we needed more battery life in both products," Panay said.
Besides specs, Panay said Microsoft has improved the pricing for the Surface.
For starters, Microsoft will continue to sell last year's Surface RT for $349, giving first-time customers a lower-cost option.
Secondly, Microsoft is selling the Surface 2 for $449, which is $50 less than what its predecessor debuted for last year. This time around, Microsoft is also including its suite of Office programs with the purchase of the Surface 2.
And finally, Microsoft is also giving users who buy a Surface 2 or Surface 2 Pro 200 gigabytes of cloud storage through SkyDrive for two years. Those customers will also get free Skype calling to landlines in 60 countries and access to Skype Wi-Fi spots around the world for one year.
The first generation of the Surface was about showcasing the touch-focused Windows 8 operating system, Panay said. The second generation is about bringing every part of Microsoft together on one device and supporting professional users.
"It's all of those software properties coming together and making sure the hardware is thinking about each one of those pieces so they can all come to life together," Panay said.
The Surface creator also said his team has more momentum than ever, thanks in large part to a boost in sales spurred by the Surface's late-summer price cut.
Panay said he and his team were excited about what is still to come for the Surface, and that's because of the potential in the tablet's click-in touch covers.
Previously, the touch covers, which are flat and double as a Surface screen cover, had 80 sensors to detect users' typing. The new touch covers have more than a thousand sensors and can now detect typing more accurately. They can also be used to perform gestures, and more importantly, Microsoft is working for ways to have all sorts of touch covers, not just those that are laid out like a keyboard.
Microsoft's first stab at this came at the unveiling of the new tablets. There, the company also showcased a touch cover that looks like a DJ controller. With that cover, the Surface can be used to create music.
The DJ tool is an example of the potential types of touch covers Microsoft could make.
"That's what's cool about it," said Stevie Bathiche, research manager in Microsoft's Applied Sciences Group, who accompanied Panay. "It becomes a platform for the future."
But before Microsoft begins selling the DJ touch cover or other types of covers, the company is first focusing on the release of the Surface 2 later this month.
"We're just getting started," he said. "We've never had more energy."