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What do you mean " it won't compete in the desktop/high end laptop segment, it's just not capable enough" ?

What is it not capable of?

Gaming on it would certainly be sub-par with that hardware, and gaming accounts for a good chunk of the high-end PC market.

Because it's obvious that gamers are Surface's prime target.

The question was whether or not it could compete in the desktop/high end market, not whether or not it was targeted at gamers.

For the purposes of those who it is marketed to, yes, yes it could.