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Only 1.5M Surface Devices Sold Since October 2012

By - Source: Bloomberg | B 56 comments

Surface sales are disappointing to say the least.

There certainly seems to be no question that Windows 8 isn't performing as Microsoft expected. Even its own branded Surface tablets are experiencing a slow adoption rate – so slow that Microsoft isn't releasing actual numbers. OEMs, retailers and market watchers generally see what's going on, hoping that some magical marketing formula will finally ignite some interest in the consumer market.

That spark in Windows 8 may rely on many factors. For one, cheaper prices enabled by possible lower licensing fees from Microsoft. A larger portfolio of touch-based solutions that won't break the consumer bank is another. Even more, consumers understanding that the desktop still exists may also boost adoption.

Sources claim that Microsoft has only sold around 1.5 million Surface units total since the Windows RT version launched in late October. They break down the numbers even further, explaining to Bloomberg that Microsoft has only sold just over 1 million Surface RT units – those based on the ARM architecture and Windows RT – since its debut. Microsoft originally ordered 3 million Surface RT units, and even expected to sell 2 million units in the December quarter alone.

But Microsoft's move to only offer the device through its Microsoft stores, which numbers just over 60, likely hampered sales in 4Q12 -- the company didn't open up sales to additional retail outlets until December. Market confusion could also play a part in poor sales, as consumers may simply not see a need to purchase a Windows-based tablet if it doesn't run their software. As for Surface Pro, the x86-based Windows 8 Pro tablet went on sale in early February, and has since only sold 400,000 units – a starting price of $900 for a tablet isn't exactly consumer friendly.

There's speculation that a lack of applications in the Windows Store is hurting Surface sales as well, especially the Windows RT model. The Redmond company claims that more than 47,000 are currently available, yet there are more than 300,000 apps for iPad. Microsoft's storefront also lacks a number of heavy-hitting apps including Facebook although just this week Twitter launched its own standalone app for the new platform.

Overall this is not good news for Microsoft given it's the company's first direct attempt to tackle Apple and Google on the tablet front. "It’s pretty clear that things were bad entering the year, and at least for the moment they’re getting worse," said Alex Gauna, an analyst at JMP Securities LLC in San Francisco. "The path to a successful Surface, in the same way that they were successful with Xbox, is not very clear to me right now."

CNET claims that the number of Surface Pro units sold thus far is not a bad start. But in the quarter that ended in December, Apple sold 22.9 million iPads, and worldwide shipments reached 128.3 million units in 2012 alone. Facing a declining PC market which converts into lost revenue, Microsoft needs better Surface unit sales, plain and simple.

"The tide continues to go out on PC sales as consumers and emerging market users prefer tablets and smartphones to Windows based PCs," said Nomura Holdings Inc. analyst Rick Sherlund. "Windows 8 has failed to ebb the receding tide."

 

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  • 20 Hide
    masterasia , March 18, 2013 9:10 AM
    It's too damn expensive. The stupid keyboard thing is an additional $100. That's BS. It needs to be in the $500 with the keyboard. Hopefully it will last longer than the Zune.
Other Comments
  • 9 Hide
    greghome , March 18, 2013 9:06 AM
    Maybe......maybe......they should allow all retail stores to sell the Surfacem Tabs cause so far the main problem is people who wants it, can't get it because Microsoft stores aren't available outside of AMERICA............
  • 1 Hide
    de5_Roy , March 18, 2013 9:08 AM
    surface is winning!
  • 1 Hide
    icepick314 , March 18, 2013 9:10 AM
    you don't market Surface Pro as a tablet...

    you market Surface Pro as a ultrabook that can turn into a tablet form...

    I want to get Surface Pro but I'll wait till at least 2nd gen with hopefully better and faster processor and RAM...
  • 20 Hide
    masterasia , March 18, 2013 9:10 AM
    It's too damn expensive. The stupid keyboard thing is an additional $100. That's BS. It needs to be in the $500 with the keyboard. Hopefully it will last longer than the Zune.
  • 5 Hide
    Azn Cracker , March 18, 2013 9:17 AM
    Their pricing is probably the biggest problem here... $400 for RT version and $800 for Pro version maybe?
  • -8 Hide
    therogerwilco , March 18, 2013 9:19 AM
    I'm digging mine, I'll agree a little cheaper would be good. But the thing people don't realize is the PC market is slowing down because there's really nothing new out there that screams WOW!!!!

    And don't talk about Apple products, the only people who buy those are not tech-smart. I mean cmon, the iphone has 1 button. Though they sold 128 million units of ipad's, look at their stocks! They make about 75% profit from every sale, yet the company is having money problems? Mhmm.

    I'm just tired of all the Apple talk, I mean seriously, I hope Microsoft only releases one every other year if that, following suit to Apple is just moronic. I would love to see some legislation about 'companies can only release a new 'upgrade' to a product line once every 2 years. Then THAT would be a worthwhile purchase instead of burning through the cash like cell companies are doing and the sheeple who buy Apple crap.
  • 2 Hide
    mitchellvii , March 18, 2013 9:41 AM
    I can solve MS whole problem right here. Put back the Start Button and give Desktop users a way to completely turn off Metro - problem solved. Now you can send my $1 million Consulting Fee to my PO Box.
  • 2 Hide
    Ragnar-Kon , March 18, 2013 9:42 AM
    therogerwilcoAnd don't talk about Apple products, the only people who buy those are not tech-smart. I mean cmon, the iphone has 1 button.

    You clearly have not spent much time in the Apple world. I am a huge tech person, and I own three Apple products. Many of employees here at Tom's own Apple products. The broadcast television industry runs primarily off of Apple, and that entire industry is tech based. So your theory that Apple people are non-tech people is completely wrong. I'm sure there are many non-tech people using Apple products as well, but I'd be willing to bet there are many more non-tech people using Microsoft products.

    Yes, there are "sheeple" out there that buy each and every upgrade Apple releases, but who are we to call them idiots? They can do whatever they want with their money.

    Anyway, I like the Surface Pro a LOT, but I can't justify spending that kind of money on it unless it gives me something I don't already have. This in combination with my general distaste for Windows 8 has pretty much stopped me from buying it. And why would Microsoft prevent the sale of the Surface in any store but their own?? Just seems dumb considering that there aren't many Microsoft stores around the country (or the world). The nearest Microsoft store is 2 hours away from my house... if I drove there I would pass four Apple stores on the way.

    Props to the Microsoft engineers that worked on the Surface though, because it is a good product--just a shame management is doing everything possible to ensure it doesn't succeed.
  • -1 Hide
    jcurry23 , March 18, 2013 9:51 AM
    who wants an RT where you can't install anything other then MS apps, which there isn't much of a selection.
  • 4 Hide
    thermopyle , March 18, 2013 9:53 AM
    therogerwilcoI would love to see some legislation about 'companies can only release a new 'upgrade' to a product line once every 2 years. Then THAT would be a worthwhile purchase instead of burning through the cash like cell companies are doing and the sheeple who buy Apple crap.

    ...I imagine Ford, GM, Intel, AMD, nVidia, ATI, etc., would have issues with this.
  • 1 Hide
    DRosencraft , March 18, 2013 10:09 AM
    Availability is definitely an issue. They need to broaden the accessible market. BestBuy and online at Microsoft simply won't cut it. The price is a little rough, but considering the specs it's not all that terrible. It's on the high end of reasonable, as opposed to being unreasonable. The other issue is salesmanship. In other words, I've seen plenty of commercials about the Surface itself. I haven't seen any promotion of the apps available to the device. For example, the Twitter thing I only realized was done when I read this story. They've got some problems, that's for sure.
  • 3 Hide
    Murissokah , March 18, 2013 10:19 AM
    How did they not see this coming? Tailoring their main product, the Windows OS, to fit the new tablet format was a huge mistake. Tablets and desktops are complimentary, not intercheangeable. Not only they failed at addressing the new market, they also hurt their captive market in the process. Windows 8 should not have happened.
  • 2 Hide
    JPForums , March 18, 2013 10:33 AM
    Quote:
    Sources claim that Microsoft has only sold around 1.5 million Surface units total since the Windows RT version launched in late October.

    You do know that Microsoft isn't the only maker of Windows tablets don't you. It's true that windows tablets aren't seeing the adoption that some would like, but representing the entire ecosystem based on the success of two products from a brand new player in the hardware market is going a little far. Frankly, most new entrants into an established market don't even do as well as Microsoft has.

    That said, I'm not sure Windows RT will be in it for the long haul, despite the early sales figures of Surface RT being more than double that of Surface Pro. Windows RT doesn't benefit from x86 compatibility and thus claims no major advantages over its Android/iOS counterparts. Microsoft's philosophy with tablets (it would seem) is productivity first, entertainment second. Their so called ace in the hole is compatibility with the existing x86 ecosystem. There is also a niche for people who want to load software easily without the need to wade through the market place to get to it (think open source, company proprietary, etc.). I've encountered a surprisingly large number of people who don't understand why they can't use their old Windows software on their Android (or windows RT) tablet. They are surprisingly resistant to alternative (even superior) software available for their platform. This group also largely happens to be the type to only want one "computer" and don't consider it worth the money to get more than one. They'll spend a fair amount more on a tablet that they can run their old software on if it means they can avoid purchasing a PC.

    So what's the problem? The price is currently more than a fair amount higher and lower battery life makes it feel less like a tablet than a poorly formed laptop. Windows 8 will be much better off when Intel releases the new Atom architecture and Haswell hits the market. Atom based windows 8 tablets should bring the necessary performance at prices closer RT levels while also maintaining comparable battery life to other tablets. Haswell will better line up with mostly laptop/sometimes tablet convertible crowd in that the battery life should be much closer to mobile territory than current Ivy Bridge based tablets. Of course AMD's Kabini and Temash should also help in this regard.

    The question is, will it be too late by then? Android has had convertibles for a good while now. Apple also has a sufficiently surface like keyboard on hand. If either of these players get sufficiently embedded in business with a strong suite of productivity software, they may displace Microsoft. Unfortunately for Microsoft, it seems more than a few businesses are pushing iPads already.
  • -1 Hide
    SvRommelvS , March 18, 2013 10:37 AM
    Had a chance to tinker with one in Staples over the weekend. I was immediately struck but how cheap the unit felt. Also, the screen should fill more of the bezel. Win8 really demands more real estate anyway, since most of its recognition iconography is text-based rather than image based. All in all, not particularly impressed.
  • 9 Hide
    animeman59 , March 18, 2013 10:37 AM
    "The Redmond company claims that more than 47,000 are currently available, yet there are more than 300,000 apps for iPad."

    Why do people keep making this comparison? Who the hell uses 300,000 apps on their tablet? Does that somehow make Apple's, or anyone's, app market that much better than Microsoft's considering that everyone uses the same damn apps anyway?
  • 0 Hide
    koss64 , March 18, 2013 10:39 AM
    After watching the demo toms had for the surface pro im totally sold on it, I just have two problems, one I cant get it as I dont live in America and second Its priced way too high,plus the price for the keyboard is just plain ridiculous(even though if probably just use the handwriting feature).
  • 3 Hide
    rantoc , March 18, 2013 10:40 AM
    MurissokahHow did they not see this coming? Tailoring their main product, the Windows OS, to fit the new tablet format was a huge mistake. Tablets and desktops are complimentary, not intercheangeable. Not only they failed at addressing the new market, they also hurt their captive market in the process. Windows 8 should not have happened.


    Yeah, they tried to force a majority of their windows users to adopt a new version of windows UI few like just so they think they will buy the surface as well, ending up selling neither. Sounds like a Steve Balmer strategy alright - Kick out that clown and get some clever people who understands that the free minded customers buy what they like - Not what MS wants them to... (we are not talking sheeps here =))
  • 2 Hide
    husker , March 18, 2013 10:48 AM
    Windows 8 and the laptop/tablet convertible devices that run it are more of a long-term upgrade path rather than a rush-to-buy-it or gotta-have-it kind of thing. Check back in 5 years and you will see that a lot of people (and businesses) decided to adopt a windows 8 device as long as they were already upgrading their hardware. And by the way, MS has the resources to wait it out.
  • -3 Hide
    LORD_ORION , March 18, 2013 10:54 AM
    So, in the war to knock out Apple iOS, Windows RT does in 6 months what Android does in 1 day?

    -iOS is well established and steady, and they have solid anti-piracy stats to attract developers.

    -The good Android manufacturers are about to shotgun blast the entry level tablet markets with good products (look at the CES announcements, you're going to see $150ish 7-inch Android tablets that have comparable specs to the iPad mini).

    -Windows RT is about to be buried in the Zune graveyard
  • 4 Hide
    pacomac , March 18, 2013 11:11 AM
    therogerwilcoAnd don't talk about Apple products, the only people who buy those are not tech-smart. I mean cmon, the iphone has 1 button. Though they sold 128 million units of ipad's, look at their stocks! They make about 75% profit from every sale, yet the company is having money problems? Mhmm.I'm just tired of all the Apple talk, I mean seriously, I hope Microsoft only releases one every other year if that, following suit to Apple is just moronic. I would love to see some legislation about 'companies can only release a new 'upgrade' to a product line once every 2 years. Then THAT would be a worthwhile purchase instead of burning through the cash like cell companies are doing and the sheeple who buy Apple crap.


    I do have to read some crap on here. I have more tech knowledge in my little finger than most on this site. I have written software for just about every mobile platform in existence and from a programmers point of view iOS is the best and most rewarding mobile platform I've used. It's essentially Mac OS with a Cocoa Touch layer on top, in other words a REAL OS... I'll not go into specifics and have a dig at Android, but most Programmers including myself are not fans of Java.

    Just because you haven't got the cash to splash out on new hardware every 6 months doesn't mean I want to wait 2 years as you suggested. I'm a fan of technology in general, and have splashed out on all sorts of hardware from all manufacturers, including 2 Android tablets (I'm not an Apple fanboy).
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