Microsoft to build 3-5 million Surface tablets this quarter: report

Microsoft to build 3-5 million Surface tablets this quarter: report

Summary: Ahead of the Surface release later this month, Microsoft is gearing up to produce a "large volume" of the Windows 8-powered tablets this quarter alone.

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Microsoft is preparing to begin a "large volume production" of its first branded tablet, due for release later this month alongside the firm's next-generation operating system, Windows 8.

Citing component supplier sources in Asia, the Wall Street Journal said the software giant is planning on building between 3--5 million Surface tablets in the fourth quarter, an increase on the amount IDC analyst pegged earlier this year, speaking to sister site CNET.

Microsoft-Surface-Tablet_620x350
Microsoft's Surface tablet, expected on October 26. Credit: Microsoft

Microsoft's figures resonate with Amazon and Google for their Android-powered Kindle Fire and Nexus 7 tablets respectively, according to the sources, but the proof of the pudding will boil down to price. 

Speaking to CNET's Brooke Crothers back in August, IDC analyst Bob O'Donnell expected Microsoft to produce "a little more than 3 million Surface tablets" in the run-up to the busy (and highly lucrative) Christmas holiday season. The figure presented by sources speaking to the Journal suggests Microsoft has significant demand for the long-awaited tablet, despite enterprise-focused users having no clue as to what the price of the device will be. 

It comes only a few weeks after Microsoft chief executive Steve Ballmer suggested that Microsoft may sell "a few million" over the next 12 months in an interview with The Seattle Times.

In the interview, Ballmer hinted at rivalry and competition with the iPad, which remains the enterprise and business user's favorite. According to research firm IHS iSuppli, Apple has a 70 percent share of the entire tablet market during the second quarter of 2012.

Apple sold 17 million iPads in the third quarter. Despite its enterprise appeal, out of the wider consumer market the enterprise slice is the thinnest. Again, depending on the pricing, Microsoft may bulk up its revenue tables with a high profit margin device, but enterprises spending in bulk will not appreciate the blatant money-grab. 

Can the Surface compete with the iPad? Likely not -- at least in sales and the consumer market. Crucially, if it can win the hearts and minds of middle-managers with already increasingly tight spending IT budgets, that will be the key to the Surface's success.

Topics: Windows, Microsoft, Tablets

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31 comments
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  • Most 'analysts' are wrong about Surface...

    "Can the Surface compete with the iPad? Likely not -- at least in sales and the consumer market. "

    - I guess you are so wrong, once the consumers start using Surface, they will understand the value it brings and will easily dump ipad. If they can get a Surface with the same price as an ipad, why waste money on a device that is nothing more than toy.
    owlllnet
    • Definitely bookmarking this one for future reference.

      It will be interesting to hear the MS and AAPL Q2 2013/Q1 2013 (they're on different fiscal years) results calls in January. We'll see if "once the consumers start using Surface, they will understand the value it brings and will easily dump ipad."
      matthew_maurice
    • Love these toy references

      Been hearing it since the Mac. Wasn't the iPhone a toy also, real work was done on Windows Mobile? lol
      dave95.
    • "Only" 3-5 million in the first quarter?

      If those reports are true, it implies that MS does not have a great deal of faith that the Surface can truly compete with an iPad. Apple sells that many iPads on a weekend when a new product is introduced.
      Wakemewhentrollsgone
      • Small production does not equal small sales

        When you first build a new product, there are lots of bugs and other logistical issues to work out, in your first run. It doesn't surprise me that only 3-5 million Surface Tablets could be produced for sale in Q3. They are a vanguard. Plus, there's all the logistics of setting up pop-up and other stores. So again, am not surprised that the Surface would have such a small initial production run. That doesn't mean small sales in the long run. What it means, is that you have to wait and see.

        By contrast, when Apple implements a new product, it already has a huge infrastructure through which to deploy it. So it can produce more, and frankly Apple's newer products are not as innovative. Remember, the Surface is built from the ground up.

        I'm not a MS fangirl, and I don't hate Apple. But these facts are true for any kind of production, especially manufacturing. So please don't comment absent these facts, at least in your head. Else you'll look like a troll.
        brainout
    • No guessing about it

      I guess you are so wrong. Once they see the cluster f**k that is a Playschool yucky tiled Windows tablet they'll be running back to the solid iPad. I love how people say something is a toy when it isn't - the sign of a real moron with an agenda.
      pgentry53
      • Yucky tiles, yes; but a more productive tablet than iPad

        My clients use iPads, iPods, and Blackberries. That's how they send email. They are all quite sophisticated in their professions, mostly physicians, lawyers, accountants, financial people. But they can't use their iPads and phones very well, restricting their emails to one or two lines.

        Once they can use the Surface, by contrast, they not only will be able to type better (if they use the Type Cover), but they will be able to work better. For they understand computers but don't like them. Surface gives them the ability to avoid a 'real computer', yet have access to 'real computer' programs. For them, it will be a boon to use Surface.

        I don't like tablets, and can't stand Win8, viewing it as you do, a PLAYSKOOL toy interface. (I even made a new logo for MS in PC World Forums, to demonstrate my disdain for the new interface's puerile 'look'.) For me, a netbook is the preferred way of handling mobile computing. Even so, I will have to eventually buy a Win8 tablet or computer, in order to help my clients use what I know will benefit them. I will hate this usage, but it's good for them; and at the end of the day, it's all about, productivity.
        brainout
    • OMG..!!!!!!!!!!!!!!!!!!

      If i were them i will go with 300 thousands and see from there... I suggest even a 100 thousands but millions ah?

      That is crazy...!!!!!!!!!!!!!!
      dkaparunakis@...
  • couldn't agree more with prior post

    The ipad (and the whole apple line) is an overpriced "slick" device that is already becoming outdated and boring. Just stack up the ipad against the live tiles of the surface and any other windows tablet and consumers will immediately see the difference. Not to mention that consumers will finally have their cake and eat it too by having a device that actually can do both consumption of media as well as productivity tasks.
    Jennifer Matthews
    • Ignorance is bliss

      Yes ignorance is bliss.

      It is DOA when it's battery life is 2 hours watch my words.
      AdanC
      • and who told you it has 2 hours battery life, Apple?

        Everywhere it has stated full day use, so for you it is 2 hours eh!
        ninjacut
    • Rinse and repeat

      Didn't we hear the same marketing speak with Windows Phones? "Who want that boring grid of icons when you can have live tiles". If only consumers cared.
      dave95.
    • Tiles suck

      Yeah once they see those Metro tiles they're eyes will open all right, in confusion and disgust. I suppose everything you see eveyday in your life is boring as well? Computer hasn't changed much? So immature, so ADD to expect everything in life everyday to be new again. The point is you USE the damn thing to see web articles, e-mails, apps, etc. and THAT'S what's new everyday. Sheesh!
      pgentry53
    • outdated and boring

      your a.......
      dkaparunakis@...
  • Surface? what Surface...

    Until they actually build them and put them in stores, this is all hot air and BS. MS has botched so many things why would this be any different. Any one remember Vista? The Zune that was going to kill the iPod? I know the Microsoft shills are out there in force but MS is coming into a market dominated by one device, the iPad. It has been integrated into the corporate IT infrastructure without much in the way of calamities. The best part of the iPad integration is, many employees bought their own and brought them into work. Saving companies money, probably negating any costs associated with IT integration(if you discount the incessant whining by network security guys).
    If MS pulls off some kind of coup and people throw out their iPads and buy Surfaces, I will be shocked. It won't happen, you might see some Surfaces in large enterprise, with deep pockets and a persistent MS based IT people. Other than that I really can't see it. After all...

    Happiness is MSFT @ 0.0001
    ps325
    • I remember some other things also...

      Yes, we remember Vista. But we also remember Windows 7. We remember the Zune, but we also remember the XBOX 360. Heck, I remember Windows 2.0, but I also remember Windows 3.1. What I have learned is two things:

      1. Microsoft is rarely successful with their first iteration of a product. The original XBOX may have been their best "version 1.0" product, and it still got trounced at retail by the PlayStation 2.

      2. If Microsoft decides to stay in a market, they will eventually succeed, usually with their third or fourth version of a product. Microsoft had a fine product with Windows Mobile. My personal opinion is that if they had modernized/updated the UI, it would have remained a viable mobile OS. Now they're back with the understanding that consumers matter and as does a good cross-platform experience. I'm not sure when they'll succeed, but I think that if they stick with it, they can carve out market share between Apple and Google.

      I'm not sure what axe you have to grind against Microsoft, and I'm hardly a stauch defender of the company, but history has shown that even though many companies can outrun MS in a sprint, very few can outlast them in a marathon.
      the.ksmm
    • I remember Vista

      The #1 best selling OS at the time. The OS that was installed on more desktops / laptops than all of OS X and Linux combined.

      Yeah, I remember Vista.
      toddbottom3
      • Re: I remember Vista

        Those days are gone, my friend. Today it is Linux that is the best-selling OS of all time.
        ldo17
        • yeah .... I remember Linux

          an OS that has to be studied for years...... read many books..... waste so many hours.... to finally become a geek to work with it to produce a couple of pages daily.....

          YOU ARE CLOWN STYLE COMMENT MAKE MY DAY..... BUNCH OF LOSERS..!!!!!
          dkaparunakis@...
        • It's not Linux, it's GNU/Linux

          And, what does GNU stand for? It's "GNU's NOT UNIX" as GNU/Linus was written mostly by people who hate Unix and love Microsoft. Isn't that ironic?!? People who have actually seen RT say it's a better interface (check out YouTube). Personally, I think it's ironic that it looks to me like the Windows Gates had in mind before seeing Apples's overlapping windows (that they stole from Xerox). Dear the.ksmm, as for V1 of things, tiled Windows 286 didn't last the afternoon for me before getting uninstalled but Win/RT seems likely take over tablets (much like the growing belated popularity of their 360).
          JimMaginnis