Why Microsoft might be looking to make cheap Surface tablets again

Stop me if you've heard this one: Microsoft, beaten to the tablet market by Apple, wants to build an alternative, one that runs Windows and gives more bang for the buck.

That, of course, was the whole strategy behind the original Microsoft Surface that launched with Windows 8 in 2012. And it's also apparently the playbook Microsoft is again working from now that Bloomberg is reporting the company is looking to debut a new, lower-cost iPad competitor with the Surface brand later this year.

That's weird, because we all know how the Surface plan played out: The first one was a billion-dollar disaster, but when Microsoft refocused around the Surface Pro line and stopped trying to compete with the iPad and instead market its powerful tablet PC as a MacBook alternative, sales soared, and the Surface found its niche as a high-end Windows machine.

Of course, the tablet market has changed considerably since the Surface and iPad had their first matchup. The iPad has morphed from a big glass slab for watching YouTube videos into a productivity powerhouse, with the current iPad Pro line arguably taking many of its cues (pen input, keyboard accessories, flagship apps based on content creation) from the Surface Pro.

Surface sales are showing signs of plateauing, though, and while Apple now competes directly with the Surface Pros, there isn't a good Windows alternative to the entry-level iPad, which starts at $329.

That might be good enough reason to commit to a line of cheaper Surface tablets, and perhaps with a similar focus: the education market. If you're a school, going with Google Chromebooks or Apple iPads presents some very clear package deals that you can jump right in with, whereas there isn't quite the same simplicity on the Windows side. This could be Microsoft's attempt to create a clear go-to package for educators looking for classroom tech solution on a tight budget.

Right now, the cheapest Surface is the Laptop, which starts at $799. According to the report, the new line of Surface tablets could run as cheap as $400 a pop. Storage will be a modest 64 or 128GB, though they're said to have significantly less battery life than the current Surface Pros. Since they're expected to pack Intel chips, they'll run full Windows 10 Pro -- Microsoft is at least wisely avoiding "splitting" Windows again with a new class ARM-powered devices, like it did with Windows RT.

The question on Microsoft Chief Product Officer Panos Panay's mind, though, must be: What does a line of lower-end Windows tablets do to the Surface brand? Over the past five years, Panay's team has built the foundation for Surface on the high end, content to let Microsoft's hardware partners fill out the other parts of the market. Is getting Windows into more classrooms worth the Surface name being associated with a line of underpowered tablets?

It's possible the Surface line has built up enough goodwill that Microsoft is confident PC buyers won't put the brand in detention for trying to appeal to students. It's also possible the company might change its mind at the last moment, like it did with the aborted Surface Mini debut in 2014, and this whole rumor ends up being meaningless. In any case, the Surface line will need to do something to evolve, and this could be jolt that opens it up to a whole new market.

A representative for Microsoft declined to comment.