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 →
Everyone knows that Apple (AAPL) gets away with charging a premium for its wares because its fans have shown they’re willing to pay more money for their favorite products than fans of, say, Samsung (005930) and Amazon (AMZN) are willing to pay. This practice has led to enormous gross margins for Apple products but has not spawned many imitators because few companies command the sort of loyalty that Apple does. But Microsoft (MSFT) apparently believes it can pull off the trick with its Surface tablet, which is actually priced higher relative to its component costs than Apple’s iPad. More →
A ray of light for Microsoft’s Surface: Consumer interest doubled Nexus tablet interest ahead of holidays
Tablets are a hot category once again this holiday season and as it did in 2011, Apple’s (AAPL) iPad lineup is seen leading the pack this year. According to a survey conducted between October and November 2012 by market research firm Parks Associates, 44% of the tablet-seeking holiday shoppers polled planned to purchase an iPad this year and 24% were eying a Kindle Fire. The study gets interesting in the No.3 and No.4 slots, however — the firm’s data shows that 21% of consumers polled planned to purchase Microsoft’s (MSFT) Surface tablet compared to just 12% who planned to by a Nexus tablet. More →
Sorry, Microsoft (MSFT) — consumers just aren’t that interested in your tablet. Ipsos conducted a poll for Thomson Reuters last week showing that just 4% of people in the United States interested in buying a tablet were considering buying a Surface. This compares to a whopping 42% of prospective tablet buyers who were interested in an iPad mini, 16% who wanted a Kindle Fire and 14% who were interested in one of Samsung’s (005930) Galaxy tablets. Reuters reporters also anecdotally found that Apple (AAPL) stores got vastly more traffic than Microsoft’s pop-up stores during the holiday shopping season and that employees in Microsoft stores said that they had “plenty” of Surface tablets still in stock. Reuters also talked with one man who was returning his Surface tablet to a Microsoft store and who explained that “with the iPad, it’s one step, and with this (Surface), it’s two or three steps to do the same thing.”
Contrary to earlier reports that claimed Microsoft (MSFT) had cut orders for the Surface tablet in half, the company on Tuesday announced that it has increased production and expanded availability of the tablet to additional retail outlets. The company’s flagship device will be available as early as mid-December in non-Microsoft retail stores in the United States and Australia with retail availability expected to expand to more countries in the coming months. Microsoft has faced heavy criticism from analysts and investors over the last few weeks, some of which have called the Surface a failure and predicted the company would only sell 600,000 units in the fourth quarter. Panos Panay, general manager of the Surface, revealed that the company has “increased production,” although he failed to give specific details. Microsoft’s press release follows below. More →
Laptop Magazine has created a small slide show listing seven ways that Microsoft (MSFT) can save its Surface tablet from the same circle of technology hell now inhabited by past Microsoft duds such as the Zune and the company’s KIN phones. But reading through Laptop’s list of suggestions, we can see that Microsoft has made several unforced errors during the launch of the Surface that the company should have seen coming from miles away. In no particular order, here are some of the key mistakes Microsoft has made with the Surface so far. More →
Microsoft’s (MSFT) Surface tablet, the company’s premiere Windows hardware offering, has seemingly not been well-received by the public. BGR saw a great deal of potential in the Surface when we reviewed it in October, but consumers have not been swayed by the slate’s sleek hardware and unique interface. Microsoft has reportedly cut its fourth-quarter orders with manufacturing partners in half, and one firm estimates that the company will sell fewer than 1 million Surface tablets in 2012. Now, a new report suggests Surface sales may be even slower than we thought. More →
Microsoft’s (MSFT) current strategy for selling its Surface tablet is puzzling to say the least. The company only offers its flagship tablet online or from one of its 32 Microsoft Stores throughout the United States and Canada. According to a predominate Microsoft blogger, however, the company may soon expand the Surface tablet’s availability to additional retail outlets. Paul Thurrott of Windows IT Pro has been informed by one of his “most trusted sources” that the Windows RT version of the Surface will be offered in traditional brick-and-mortar locations “within days.” More →