Now that we know the Surface has likely sold well below Microsoft’s (MSFT) own expectations, it’s fair to ask, “What went wrong?” Well, a lot of things: the Surface is priced too high, for one, and there doesn’t seem to be much reason for the Windows RT operating system to exist. But there’s a third aspect here that shouldn’t be overlooked, even if it’s not as important as the first two factors: Namely, that the Surface’s advertising campaign has been bafflingly terrible. More →
Cumulative sales of Microsoft’s (MSFT) first two tablet models have failed to meet expectations, according to a new report. Citing multiple unnamed sources, Bloomberg on Thursday evening reported that sales of Microsoft’s Windows RT-powered Surface tablet have reached just above 1 million units to date. According to the same sources, Microsoft ordered about 3 million Surface slates from its manufacturing partners. Sales of the newer Surface Pro model have totalled about 400,000 thus far, the report claimed. The numbers seem fairly in line with earlier estimates that suggested Microsoft would sell fewer than 1 million tablets in the fourth quarter last year.
Questions surrounding the success or failure of Microsoft’s (MSFT) debut tablet lineup continue to swirl, but the company has made it very clear at this point that it has no plans to release any numbers. Microsoft executives have repeatedly avoided sharing any hard data surrounding the Surface tablet’s performance, and no indication was given on the company’s recent earnings call despite recurring rumors that the first Surface slate flopped. Now, MIT’s Technology Review blog interviewed CEO Steve Ballmer and still couldn’t manage to get anything out of the outspoken executive with regard to Surface sales. More →
After reviewing Microsoft’s Surface tablet last October, I came back a month later and revisited the slate after spending a more substantial amount of time with it. My conclusion was very much the same — I love the Surface hardware but some of the tablet’s software issues are hard to overlook — but I added an important note: the Surface was a good tablet, but it felt like an appetizer. What I really wanted was the main course. More →
Following the launch of its second piece of Windows hardware, Microsoft (MSFT) CFO Peter Klein suggested that the company may be working toward releasing a third tablet that addresses the emerging market for smaller slates. During a presentation at the Goldman Sachs Technology & Internet Conference on Wednesday, Klein said that Microsoft is prepared to attack the tablet market on all fronts, be it with a larger device or a smaller one — or both. More →
Microsoft (MSFT) is in the early stages of a major shift as the world’s largest software company begins to compete with its vendor partners by releasing its own Windows hardware. While some believe the strategy is sound since Microsoft’s partners are too reliant on Windows to put up much of a fight, one former Microsoft executive thinks the company is “basically malfunctioning” by encroaching on its partners’ businesses. Instead, he thinks Microsoft should be dominating the social networking space. More →
Just because Microsoft (MSFT) hasn’t figured out a way to sell the Surface yet doesn’t mean that Windows-based tablets are doomed. Per AppleInsider, Forrester Research’s annual Mobile Workforce Adoption Trends survey of nearly 10,000 information workers shows that there’s even more demand for Windows-based tablets in the enterprise than there is for the Apple (AAPL) iPad. In fact, Forrester found that 36% of workers surveyed said they wanted to use a Windows-based tablet at work, compared to 26% who wanted an iPad and 12% who wanted an Android tablet. This suggests that there’s a significant potential market for the Surface Pro as a workplace computer and that Microsoft could have a big potential opening to get users hooked on both Windows 8 and Windows-based tablets in the near future. The prospects for Windows smartphones aren’t as bright, however, as the survey found that only 10% of workers surveyed wanted a Windows Phone device for their next work smartphone, versus 33% who wanted an iPhone and 22% who wanted an Android phone.
Another day, another sales estimate that suggests Microsoft’s (MSFT) debut tablet has been a dud with consumers. IHS iSuppli has told CNET that Microsoft shipped roughly 1.25 million Surface tablets last quarter but that actual sales of the device “were significantly lower, maybe on the order of 55 to 60 percent of that figure,” which CNET notes would put Surface sales between 680,000 and 750,000 units. Just how bad is this? Consider that Microsoft last fall reportedly placed orders for between 3 million to 5 million Surfaces for the 2012 holiday quarter. Then consider that iSuppli says that the Surface had a “very high” return rate because consumers apparently had difficulty getting used to Windows RT at first. Add all those things together, and you have a genuine debacle for Microsoft and its first attempt at building a tablet capable of taking on Apple’s (AAPL) iPad.
Want more evidence that Microsoft’s (MSFT) Windows RT Surface has been a bomb? Consider that Barron’s has rounded up analyst estimates and has found that Microsoft sold 1 million Surface tablets at best last quarter. Want some lower estimates? Barron’s says that Citigroup analyst Walter Pritchard thinks Microsoft sold between 700,000 and 800,000 Surfaces last quarter, while Goldman Sachs analyst Heather Bellini pegs Surface sales at a measly 230,000 units. Of course, the Surface brand could get a boost in the near future if businesses take a liking to the Surface Pro over the next months, but for the time being it looks as though Microsoft’s first effort at selling tablets has been a bust.
Microsoft (MSFT) has a problem on its hands: Its Surface tablets cost an arm and a leg to purchase, and so far it looks like no one is buying them. The ARM-specific Surface RT is available for $630 with the optional, but highly recommended, magnetic keyboard dock, while the Window 8-powered Surface Pro is offered for $1,030 with the dock. During the company’s earnings call on Thursday, Microsoft CFO Peter Klein suggested that cheaper and more Windows 8 devices will be available in the future. More →
Microsoft’s (MSFT) debut tablet isn’t shaping up to be the runaway success story the company was likely hoping for. New estimates from UBS analyst Brent Thrill suggest Microsoft only sold 1 million Surface tablets during the holiday quarter. The news could represent a setback for Microsoft’s Windows RT tablet operating system, as a number of PC vendors are reportedly using the Surface as a gauge to determine whether or not they should embrace the new platform. The only good news, perhaps, is that the analyst’s Surface estimate is slightly better than earlier projections from Detwiler Fenton suggesting Surface sales wouldn’t even reach 1 million units in the fourth quarter. In his note to clients, which was picked up by Business Insider on Monday, Thrill also trimmed his revenue and EPS estimates for Microsoft’s second fiscal quarter to $21.3 billion and $0.76, respectively.
Apple’s (AAPL) staggering success over the past few years can be attributed to the combination of several key factors. Great leadership is one, great products is another. Apple’s deep pockets and monstrous marketing budget have played an equal role in the company’s success but according to a new report, Apple may be losing its grip on an important demographic. More →
While it does have drawbacks just like anything else, Microsoft’s (MSFT) Surface is a great slate for those looking for a fresh new take on the modern tablet. Unfortunately, it doesn’t look like very many people were looking for a fresh new take on the modern tablet this holiday season. In a recent note to investors, R.W. Baird analyst William Power recounted recent conversations had at retailers including Best Buy (BBY) and Staples (SPLS). While speaking with sales reps at the stores, Apple’s (AAPL) iPad was the most highly recommended tablet while Amazon’s (AMZN) Kindle Fire line and Samsung’s (005930) Galaxy Tab line were both recommended as alternatives. Microsoft’s Surface tablet, on the other hand, was not pushed by reps at either chain. More →