Just one million Surface RTs sold?

Just one million Surface RTs sold?

Summary: UBS has put a number on Surface RT sales - it's definitely a slow start for the Microsoft tablet, but possibly better than some analysts expected.

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Microsoft has only sold one million Surface RT devices since the tablet was released last October, according to UBS analyst Brent Thill.

In a note to clients on Monday, Thill downgraded expectations for the Microsoft device from two million units, citing ongoing competition from Apple's iPad and few distribution channels as the reasons behind the Surface's lower than expected sales.

Microsoft expanded distribution beyond its own stores late last year: in the US, it added Staples and Best Buy, as well as JB Hi Fi in Australia. However, the device remains unavailable either online or through retail stores in dozens of markets, including China and much of Europe.

UBS' numbers are significantly lower than the three to five million Microsoft was said to have initially scheduled for production in the quarter (a number the company was thought to have subsequently slashed). 

UBS' downgraded figure is in line with an earlier estimate by analysts IHS iSupply that Microsoft would sell around 1.3 million in the quarter, but still more optimistic than others who last month dialled down predictions from one to two million to no more than 600,000.

Microsoft's minor share of the booming tablet market turns the tables on historical comparisons between it and Apple on the desktop, in which the latter has traditionally held a five-percent share.

The Redmond company's humble efforts in the tablet game now see it with just five percent of the number of Apple's tablet shipments: analysts predict Apple will shift over 20 million iPads in the current quarter -- helped along by the arrival of the smaller and cheaper iPad Mini, which launched around the same time as the Surface RT.

Despite the sluggish start to RT, UBS' Thill is still optimistic about the prospects for the Surface Pro, expected to be released this month.

While RT may be not be tempting consumers over the iPad, Thill expects the Surface Pro to find a more natural home in the enterprise, and is forecasting 2.5 million units to be sold for the financial year 2013.

Topics: Microsoft Surface, Microsoft, Mobility, Tablets

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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109 comments
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  • Another 'Analyst' story

    These are pure speculation and nothing scientific about how these numbers were derived, so these numbers from the so called 'analysts' are nothing buy BS. These analysts are no better than SJVN and AKH or average Joe on the street.
    Owlll1net
    • yeah i doubt this analyst too

      1 million is too much logically for this junk it should be around 600-700 at most!
      L3thargic
      • Surface Less than iPad but greater than Macs!

        Shouldn't it be noted that Apple had their best quarter ever in Q4 2012 and only sold 1.1 million Macs?!?! Given that it's not an iPad vs Surface comparison but it's still likely the same Surface devices sold than Macs in the same period.
        pauledl
        • Not suprised

          This product is getting so much bad press by biased bloggers and Mac lovers / MS haters. I am not suprised that they didn't sell more.

          I own one, I love it. I love my iPad too (Yes you can appreciate two different product in 2 different ecosystem) but, the Surface is a completely different animal, a lot more usefull it is.
          gbouchard99@...
        • It should be noted that you're wrong.

          From Apple's Q4 2012 report, http://www.apple.com/pr/library/2012/10/25Apple-Reports-Fourth-Quarter-Results.html. "The Company sold 4.9 million Macs during the quarter, a 1 percent unit increase over the year-ago quarter." I'm pretty sure NO ONE, not even Steve Ballmer, thinks Microsoft sold more than four million Surface RTs. So, you're wrong twice.
          matthew_maurice
        • You need to check your numbers

          Apple hasn't even reported their Q4 2012 numbers, which is their financial Q1 2013. Apple has sold more than a million Macs every quarter since Q4 2004. They're due to report 5 million or so for calendar Q4 2012. They reported 4.9 million the quarter before that.
          Info Dave
      • You know it's not good when analysrts have to guess at sales figures

        just look to Apple's stock price and thir silence on iPad Mini mini sales for that. ;)
        William Farrel
        • You know that analysts love to f@^# with stock prices.

          It's how they rip the rest of us off. :)
          Champ_Kind
    • RE: Another 'Analyst' story

      You'd better hope that the 'analyst' is correct. From the article:

      "UBS' Thill is still optimistic about the prospects for the Surface Pro, expected to be released this month ... Thill expects the Surface Pro to find a more natural home in the enterprise, and is forecasting 2.5 million units to be sold for the financial year 2013.

      Because the enterprise is Microsoft's last hope for it's Window 8- and RT-based tablets. If Microsoft cares about the consumer market, they'd better mark down the price of the Surface RT substantially. Otherwise, most consumers won't give it a second look. Didn't HP make a similar mistake with the launch of the WebOS-based TouchPad some time ago?
      Rabid Howler Monkey
    • MS should just pull an Apple move (when iPhone sales dropped)

      lower the price by $100, and give theose that bought a Surface a $100 gift card to the Microsoft Store, or online.
      William Farrel
      • Nice idea, but...

        While there is plenty to be purchased for $100 in iTunes, there is not much of value in the Microsoft App Store.

        What goes around comes around.
        danbi
    • If true, it's worse than I thought.

      Didn't Apple sell that many iPads on the first day of release?

      I can't say I'm really surprised. As soon as they revealed that this "Windows tablet" wouldn't run any existing Windows applications, I figured it was going to be a pathetic showing. If it doesn't run Windows existing applications, why bother with a thicker, heavier, shorter battery life device that has microscopic app support? Might as well have an iPad with it's 150,000 apps and vast ecosystem of supporting hardware or an Android tablet with its lower price and numerous apps. Both are just as compatible with existing Windows apps as a Surface. Which is to say, you can run the apps via remote desktop on your desktop machine.

      Personally, I don't even see the Intel based Windows tablets doing very well because the UI on Win 8 is a severely crippled mess. There are new OS leaders in town and they aren't Microsoft. Microsoft's major screw-up with Windows 8 is going to kill their massive lead on every other OS. For the first time ever, I feel like in a few short years, people will lump Microsoft in with Visicalc, Netscape, RIM, and AOL as companies who threw away their massive markets with poor strategic decisions. If Win 8 is their future, I'll pass.
      BillDem
    • I don't put much faith in analysts either

      but I do find it funny that you call this prediction BS since it's not positive for the Surface RT yet pretty sure I have seen you fully buy into analyst predictions in the past that were negative for something Apple.
      non-biased
  • 1 million sold even though it was hardly available !!!

    Dunno what went on in Microsofts CEOs minds to sell the SurfaceRT only via web and in a very few BricknMortar stores.
    But ... selling 1 million items of something that is really hard to get is quite an achievement !!!
    Add the devastating press articles and the rather high price ... and you get a hidden winner.

    Imagine MS makes SurfaceRT widely available and slashes price say 30%. That would take a fair bite out of Apples and Googles pad business.

    I personally don't like SurfaceRT but "Credit where credit is due".
    EnticingHavoc
    • Apple didn't sell a million iPads until its second quarter of release

      I site that data to show how hard it is to sell a million units. The iPad was a game changer. Surface RT, not so much. I doubt we'll ever hear actual sales data on how many Surface RT tablets were sold.

      A million units through 60 store is almost 17,000 per store. That didn't happen. Sure, there were on-line sales, and Best Buy and Staples got involved late in the game. But a million units is ambitious. I'm not willing to credit Microsoft with anything just yet.
      Info Dave
      • well u dont actuallt have to credit microsoft because

        Microsoft didnt release those numbers
        Master Wayne
      • Your comparing Apple and Oranges

        Apple invented the market and had no competition, they had time to let people figure out what this new Pad was. MS is way late to the party and is entering a heated fight already under way with an noncompetitive product. They can still make a fight of it if they make the right moves. At present this is not happening and we see the results.
        KBabcock75
      • No, 17,000 units per stroe is not realistic, but once you factor in ...

        ... on-line sales, it is completely realistic that Microsoft sold a million units in close to three months (as of 20 January 2013).

        By the way, Apple has about the same number of retail locations as Microsoft - though many more retail partners.
        M Wagner
        • Not really. Microsoft has 64 stores to Apple's 250 (US) 395 worldwide

          so not really "the same number of stores", to be honest
          William Farrel
      • Apple sold 3.3 million iPads in its first quarter of release

        ((( "Apple didn't sell a million iPads until its second quarter of release" )))

        They did, actually... 3.3 million in less than 90 days:

        http://www.cbsnews.com/8301-505245_162-57500268/number-of-ipads-sold-by-apple-by-quarter/
        buddhistMonkey