Price and 'lukewarm critical reviews' put a damper on Microsoft Surface

Price and 'lukewarm critical reviews' put a damper on Microsoft Surface

Summary: Microsoft's decision to create an information vacuum with regards to Surface tablet sales is leaving a void that analysts are more than willing to fill with bad news.

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Microsoft is being tight-lipped about sales of its Surface tablets, and this is leaving an information vacuum that analysts are more than willing to fill with negative speculation.

The latest prediction that things are not all well with Surface comes from J.P. Morgan analyst John DiFucci, who predicts unit sales for the tablet of around 700,000 for December, and 2.6 million for the entire fiscal year.

Supply chain chatter suggested that Microsoft had initially ordered one million Surface units, so that 700,000 figure is certainly in the right ballpark.

As to what's wrong with Surface, DiFucci has no shortage of ideas.

See alsoMicrosoft Surface tablet pulling in PC-level license fees in a post-PC world

"We believe a number of factors, including price, the lack of cellular connectivity, and relatively lukewarm critical reviews will limit its broad appeal at this time," DiFucci wrote in a note to clients.

"In addition, at least some Surface sales will be cannibalistic to traditional laptop sales," he added.

So not only is the presence of the Surface tablet in the ecosystem harmful to other tablet makers, it is also having a negative effect on PC OEMs. 

The PC industry is not alone here, with analysts predicting that Apple is seeing the same thing happen with the iPad mini cannibalizing iPad sales. Biggest difference here is that either way consumers are buying a high-margin Apple product, rather than a competitor's product.

DiFucci also spreads gloom over the remainder of the PC industry, quoting Gartner figures that suggest PC unit shipments for December are down some 5.5 percent compared to the same period last year.

Compare these estimated Surface sales to the 14 million iPads that Apple sold last quarter and you begin to see that Microsoft has a long way to go before the Surface is a serious contender in the tablet market.

Image source: Microsoft.

Topics: Microsoft Surface, Microsoft, Tablets

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102 comments
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  • Microsoft doesn't seem to get it...

    many folks already have a tablet. Eventually, they may all swarm to Surface R/T or Pro tablets/PCs whatever..., but for now, they are likely going to have to take a hit on price to gain marketshare (I suspect they may be coming around to this way of thinking, but I am never sure Microsoft gets "it" on how the real world works). Until such time as the pricing gets better and Microsoft sweetens the deal with respect to "extras" (Windows 8 Pro for free instead of extra money) there may be little reason to rapidly adopt. If they are happy to get there in a slow manner which doesn't create much buzz, then many will eventually buy the new devices. Making it difficult for Tech Enthusiasts to dual boot some of the devices is another thing that simply makes many ask "Remind me why do I want/need one of these Microsoft things again?"
    jkohut
    • Controlling the retail experience and altering the message

      I think MS should flood the US and other areas with pop up stores, where it can control the retail experience, to seed the market place with its devices and other Windows 8 touch based PCs. Also have people hand out flyers near these pop stores, to drive customers to them. I believe MS could also establish a better retail experience in stores like Best Buy.

      I also believe MS should make the case in its ads, how Windows 8/RT touch based PCs are better than the old PCs people are using. MS could say that Windows 8/RT touch based PCs bring new experiences and capabilities to users, and are better and more economical than cheaper tablets, because they do a whole lot more. I believe many of the new ads should be the 'man in the street' type of ads that were used in MS' old, "I'm a PC" ad campaign.
      P. Douglas
      • Wow

        Love my job, since I've been bringing in $5600… I sit at home, music playing while I work in front of my new iMac that I got now that I'm making it online(Click on menu Home)
        .....http://goo.gl/0vFoy

        Happy New Year!
        JesseTyler
      • I absolutely agree!

        I also believe MS should make the case in its ads, how Windows 8/RT touch based PCs are better than the old PCs people are using.

        Numerous analysts have openly wondered why Microsoft is too busy trying to match the hip new-age commercials of Apple instead of just telling people the facts. Then again, why bother to tell people why your product is superior when you can entertain them with an ethnic and gender diverse dancing ensemble that leaves no one out. Heck, it even includes Catholic school girls! Microsoft is like that out of touch old uncle that is always trying so desperately to act young and be hip but has no clue how ridiculous he looks. Dear MS, quit trying to force people to think of you as "likable" and actually BE likable for once. The first step to being likable is abandoning falseness and pretentiousness.
        mooseboulders
      • Flood the US Market With Pop Up Stores?

        Why? Because everybody who wanted a Surface couldn't get their hands on one? Because of the throngs of people lining up at Microsoft stores to buy Surface? There's a reason MSFT cut orders from the factory in half.

        MSFT should make a case for their Surface by making a good product. How about providing some quality apps in their app store? They've had years to get developers on board. iPad didn't come out last year.

        Why is their tablet so expensive? It's at the same price point as iPad, not the little one mind you. There's nothing economical about a $600 tablet when you can have a Nexus 7 + bluetooth keyboard for half that price.

        You can't push product on people and have them buy it. That's the old model of sales distribution and it doesn't work. MSFT is late to the party as usual. There's already 2 entrenched competitors. If they don't have a clear market strategy on who and what their target market is and provide a product that Wows people, there's no reason to buy it.

        Soon MSFT will come out with Surface Pro. Why? If it can do everything Surface RT can do, then why bother with RT? Surface Pro is the tablet that everyone wants because it's a full fledged OS. It's decisions like this that are killing MSFT.
        Maha888
    • I like

      the Surface RT; it's beautiful, lightweight and responsive. But ... given the price, lack of GPS, and no real "wow" factor that sets is apart from other W8 or Android tablets, it will remain on my "consideration" list until my current Galaxy Tab dies.
      roteague
      • then you should consider the Asus VivoTab Smart

        It is under 499 and comes with optional TranSleeve Keyboard works like TouchCover of Surface RT and Pro. It has full Windows 8 since it runs on Intel Atom (CloverTrail) processor and battery lasts for 8.5 hrs (Asus claims), http://www.asus.com/News/6len5EjIDAbbaBg0/
        This also has 32GB of ASUS web storage and its Supernote app. I already have a Surface RT, and planning to get this to complement my laptop.
        Ram U
        • Thanks

          I'll have to check that one out. I admit, I've been more interested in the RT version, because of what I would use it for.
          roteague
    • I agree with you about dual boot installations.

      "Making it difficult for Tech Enthusiasts to dual boot some of the devices is another thing that simply makes many ask "Remind me why do I want/need one of these Microsoft things again?""

      I have to agree. Upgrades should support dual boot installations. In fact MS would probably get more upgrade purchases, as this is far less messy than doing a straight upgrade.
      P. Douglas
      • Huh?

        Wow - didn't realize the iPad dual booted - presumably since you rank it as a must have for the Surface this is standard on Apple - oh wait ....

        As for those mentioning cell data, NFC, and GPS - these aren't found on the comparably priced WiFi iPad - and Surface has more local storage, an additional storage expansion slot, and HDMI and USB connectors

        Listing NFC is silly since who's going to tap and send a tablet - iPhone/iPad lacks this - and Surface can easily transfer files natively via WiFi or Bluetooth

        GPS? On my phone

        Cell data - Lumia works great as hot spot - why spend more for HW and service on tablet?
        archangel9999
    • I think Microsoft does get it

      you would have to think that a company that's been around for 20 years with billions in sales "gets it" more then many others, ourselves included.

      Otherwise we'd be the billionaires, not them. They "got it" with XBox, Kinect, Sharepoint, Office, ect. They "got it" by investing early in Facebook, and walking away from Yahoo. They've missed it every now and again, as all companies have.

      They have access to many of the same people, so to say that some company or another gets it or doesn't really never made sense to me.

      You're right that many folks already have a tablet, and when you go to upgrade, most will stick with the new version of the product they already own if they have an investment in it.
      Nothing you can do about that. Should Apple give up on the PC as teh vast majority is Windows based? Then why stop now wit the Surface.

      Like XBox, you have to let it grow, give people a chance to leave Android and iPads. It never something that will happen overnight.
      William Farrel
      • IBM

        IBM was around for quite some time before Microsoft existed. They were the dominent player in the field, and by all indications, they "got it". Then they introduced the PS/2. No, not the PlayStation 2 ... the PS/2 with it's microchannel architecture and no compatibility with ISA/EISA. As much as I loved OS/2, they didn't "get it" with that either. IBM's arrogance led to the rise of Microsoft.

        Just because Microsoft has been around for 20 years doesn't mean it is still visionary and "gets it".
        davidr69
        • Access to the same people, davidr69

          this is different times then the old IBM days. In the old days nobody could sell cars that could compete with the big guys, so they went out of business.

          Different story today. Just because IBM didsomething in a different time and place does not mean anything today.

          The fact thatMS didn't go bust means they're beyond that point in time, thi is a whole different world then the IBM days.
          William Farrel
    • I agree, mostly...

      You're absolutely correct that most people already have a tablet, and that they may choose a Surface R/T or Surface Pro in the future (I'm waiting myself for a Surface Pro that has all-day battery life). But, most tablet buyer already have an iPad (Android tablets haven't sold yet in significant numbers outside of the Kindles), and will wait until they need to be replaced in a year or two before replacing.

      I believe MS should keep its premium pricing; racing to the bottom with the Android tablets will only reinforce the FUD that the platform is in trouble. It'll take a couple of years for MS to get its tablet sales where they want it to be, but it'll be worth the effort to shareholders in the long-run (yes, high prices suck for the consumer, but non-discriminating users have a wide selection of lower priced, lower quality tablets to choose from).
      tonymus
      • Slight correction...

        I meant to say most people "in the market for a tablet" already have a tablet, sorry...
        tonymus
    • Surface...

      It's too bad sales aren't stronger. I bought my wife a Surface to replace her aging laptop and she absolutely adores it (the inclusion of Office is key). Granted, she isn't much of an apps consumer, but it functions enough like a "real" computer to take care of all her needs.
      idenchasy
    • No, M$ doesn't get it at all.

      M$ is not good at running a business, and hasn't been since the very early days. They were GREAT at running a monopoly, but they aren't allowed to do that since the anti-trust days.

      When I heard the first descriptions of the surface concept, I was pretty excited. I thought they were onto something, but they missed the point. It was supposed to be everything good about a large tablet, plus the ability to run Windows software, and a flip out keyboard/cover/kickstand. Instead, it is less than a tablet, less than a phone, less than a laptop, less then a PC, and costs a third more than any other individual device does. It is too big to stick in a coat pocket or lounge on the sofa with, too different to run existing software, too new to have an app ecosystem, too consumer oriented to be considered for business, too business-like and too expensive to be considered by consumers, not powerful enough to do CAD or other intense work, not a phone or cellular data compatible, etc...

      Too bad. They should have aimed at one target and hit it. Instead, they tried to aim at every target at once, and missed them all!
      mlashinsky
    • Pricing is the problem.

      The public has long ago shown, firstly, that they do not usually want to put a whole lot of money into a computer. Lower grade hardware, or lower grade assembly in the mind of the public is a fair trade off for a noticably better price. It is the way.

      People generally like Microsoft products, but once they reach the same, or a higher price than the competition, people will indeed give the competition a very close look for consideration.

      In the smartphone and tablet market where MS is already well behind the competition sales wise this means pricing is not just a very important factor for MS, its now the premium factor.

      Sorry MS. You really have to find a way to drop those prices or your going to make many people choke.
      Cayble
  • I don't give a...

    I honestly don't care. I got mine on day 1 and even if Apple sold 25 millions of their iPads, I still think I have the most useful of the two. I know that simply because I've been using it. Really use it. Not just downloading stupid apps. I have been using to browse the web, read, work, take my emails, edit word and excel docs, get the status of my servers remotely and even program some Sql on sql management studio using remote desktop, Print, listen to music from Xbox pass, browse windows networks,..... All that from various locations. As part of computerised world, it's a great tool...and a fun one also.

    I could have done some of my daily tasks on my iPad but most of it not or at least not as simply. My iPad experience is, until now a very clostrophobic/iTune controlled adventure. It's not enough for me. The lack of apps for windows 8 is becoming a very light issue. More and more are arriving and the ones I need are already available.

    The surface Rt is reliable, well thought but not perfect. But, it is overall, the best tablet out there by a mile. Critics....I mean MS haters have been throwing all the rocks they could find on this product. Sells aren't good I must admit. But the product was very poorly introduced to the market and that was a very bad idea.
    gbouchard99
    • I agree.

      I find mine far more functional than any other tablet on the market.

      That said, I really hope to see big changes in WinRT in the future. There's a lot of unneeded baggage lingering around that I wish Microsoft would have just removed straight up.
      The one and only, Cylon Centurion