What's behind Microsoft's Surface fire sale?

What's behind Microsoft's Surface fire sale?

Summary: Is Microsoft clearing out excess inventory of its Surface devices (especially its ARM-based ones) in preparation for next-generation devices?

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Next week at Microsoft's TechEd conference in New Orleans, Microsoft is offering attendees a deal on Surface RTs and Surface Pros. Limited to one RT and one Pro each, per attendee, users can pick them up for $100 (for the RT) and $399 (for the Pro).

touchcovers

That price is substantially cheaper than the $399 Surface RTs that WPCentral reported seeing in Staples a week or so ago. (The regular, non-discounted Surface RT price is $499 for the 32 GB version and $599 for the 64 GB one, plus covers for an additional $120 to $130 each.)

Piling on, Microsoft also just announced another Surface RT promotion: a free touch or type cover for every Surface RT purchased in the U.S. and Canada between May 31 and June 30.

Microsoft officials continue to say the company isn't backing away from Windows on ARM. Windows Blue will include both Windows 8 and Windows RT flavors, with both of these coming in the form of public previews on June 26. In recent ad spots, Microsoft has chosen to pit against the iPad mostly Windows RT devices (including the Surface RT), rather than Intel-based Windows 8 ones.

So what's a Windows watcher to make of Microsoft's apparent firesale on current generation Surfaces? The obvious explanation is Microsoft is clearing out its own unsold inventory in preparation for the next wave of Surfaces.

Microsoft officials have continued to decline to say how many Surfaces the company made or sold to date. The most often-cited estimate is somewhere in the vicinity of one million Surface RTs sold in Q4 2012 and 400,000 Surface Pros in Q1 2013. It's been rumored that Microsoft substantially overestimated demand for the ARM-based Surface RTs and underestimated the popularity of the high-end, 128 GB Surface Pros.

We know there is more Surface-branded hardware coming from Microsoft. According to sources of Windows SuperSite's Paul Thurrott, Microsoft has bullish projections about how many Surfaces it can sell in its fiscal 2014 (which starts July 1 of this year): 25 million Surface devices.

We also now know there's a 256 GB Surface Pro model that is starting to roll out, beginning in Japan on June 7. And there have been plenty of rumors about a new "mini" Surface that will fall between 7 and 8 inches, depending on whose sources one believes. 

Though no one from Microsoft has said publicly when and if the company will start using Intel's new Haswell or Atom chips in second-generation Surfaces, many users are hoping this will happen before this year is out, so that they'll have higher battery-life devices that can run their existing Windows apps. Many users also are hoping that 4G connectivity, keyboards providing extended battery packs, and maybe even Surface docks could arrive sooner rather than later. Microsoft officials have not promised when or even if any of these will be available. 

While we wait for more about what's coming on the Surface front, Microsoft is continuing to update the Surface RT and Pro firmware and apps.

Microsoft made available to Windows 8 and Windows RT users on May 31 an update to its suite of "core" apps, which include the Mail, People, Calendar and Messaging apps. The updates are available to users from the Windows Store on Surface devices, though possibly not for other Windows 8/Windows RT PCs and tablets. According to the release notes on my Surface RT, the updates are focused on reliability and performance. I am not sure what's in the updates specifically, as the release notes are old. I've asked Microsoft for clarification, but have not heard back.

As my ZDNet colleague Ed Bott noted today, these core apps won't be updated again as part of the Windows 8.1 "Blue" preview; that will happen when Blue is released to manufacturing. But Microsoft will be updating a number of the other Microsoft-developed apps that it ships with the operating system as part of the preview.

Topics: Windows 8, Intel, Microsoft, Tablets, ARM, PCs

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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107 comments
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  • Well they have to sell the junk real fast, now don't they

    And we thought EVERYBODY liked the Surface. Fanbuis here on zdnet have been telling us this for months.

    Don't tell me they LIED...
    CaviarRed
    • Weren't you banned?

      Whatever happened to CaviarBlue?

      Did the ZD|Net Security eat him?
      ForeverCookie
    • Probabaly you didn't read the complete post

      the fire sale is really not fire sale. There is a baggage AKA, TechEd. It is a paid event and you have to pay whooping $2,195 to get there + travel expenses. Now think about this how many people would go there. Even if it is a lot more than Google I/O or Apple WWDC size, it is still not million+ people attending. That makes this not qualified for the stamp fire sale. Please read the entire post before showing your undies here. And they are giving away TouchCovers for free with new device to encourage sales for a limited time, which most of the businesses do once the product is there for few months or a newer generation of the same device is being introduced. And this practice can be observed from cars to any consumer oriented product.

      Last week I saw few flash drives on sale at BestBuy, 128GB was sold for $59.99 and this week they are selling it again for $149.99. That doesn't mean BestBuy is selling 128GB flash drives on fire sale.

      Please come out of hatred and start loving things, you will be a better person. Peace and Love to prosper, not hatred.
      Ram U
      • Microsoft is not so nice by comparison

        Google I/O - > free Chrome Book Pixel (1299$)
        TechEd -> Discounted Surface (400-700$ savings)

        Hopefully the attendees will see plenty of free software. I actually feel sorry for them. Poor Windows developer have already had to learn several new API and buy new equip to develop on their platform. They have been more friendly in the past, hopefully they will have some secret gifts.
        alex_darkness
        • Actually Microsoft is what you would call *Nice* in this sense

          BUILD 2012: All attendees got 100 GB of Skydrive storage, a Microsoft Surface RT, and a Nokia Lumia 920 all for free.
          Jabe124
        • LoL.

          Google has only one event - I/O every year
          Microsoft runs at least 3 major events - Build, TechEd, TechNet and also every month local .NET, SharePoint etc. events. During these events they give away a lot of products for free and also during the last BUILD event they had given away Surface RT+SkyDrive100GB (forever) for free. Google gives 1TB for 3 years, after that what, you have to pay, but with SkyDrive you could keep it for free. Also like Jabe124 mentioned above, they have given away Lumia 920s in addition to Surface RT+SkyDrive.
          Ram U
          • Of course they gave away...

            ...they knew it would flop in the market...

            And now for real news... most .net developers do Web work and have no interest whatsoever on Metro just as they didn't jump the ship with WPF.

            Why? Because we have been left behind twice before. First with Visual Basic 6 and then with Silverlight. No free Surface RT nor Lumia 920 will make us relive past mistakes.

            Just as the old saying goes: "fool me once shame on you fool me twice shame on me"
            cosuna
          • Promoting a product with "freebies" is not the same as failing,

            and freebies are used often, by many different corporations.

            So, let's see...

            If Microsoft sells 1.5 million Surface tablets, and gives away, for promotional purposes, some 200 or more of those devices, does that constitute a failure in your little mind? Never mind; I just answered my own question, by referring to your "little mind", which would never understand the concept.
            adornoe
          • Cosuna, I agree that's why Google gave away the Pixels.

            They knew only fools would pay 1200+ for a laptop with no real OS and only a browser.
            Nice observation!
            xuniL_z
        • TechEd != I/O

          TechEd isn't Microsoft's main developer conference of the year like I/O is for Google. That would be Microsoft Build and when I went there two years ago I got a Samsung tablet bundle valued over $1500. They're plenty generous to their developers.
          chefgon
        • This is in addition to the usual free items

          The attendees are given the option to buy these in addition to the usual free gifts they get for attending like the last event we got a Surface RT and Nokia 920 and Skydrive Storage and let me tell you I will never own an IOS or Android phone again but thats another story. I really love how they call this a fire sale because it the Surface RT was available for $100 I would be loved at XMas for getting everyone in my extended family RT's.
          mjmayerhofer
      • Convention pricing

        Apple's developers convention sold out in an hour for a similar price without giving away iPads. Just sayin'.
        dheady@...
        • Apple could slap it's logo on a turd, and it's fanbois would be willing to

          pay $500 to be the first on the block to own that crap.
          adornoe
          • Like rats clinging to the sinking ship

            It must be painful to be a MS fanboy these days.
            IC12
          • I guess my comments hit very close to your home, didn't they?

            BTW, to me it's pretty silly to be a fanboi of anything, or anyone, or any company. That's so immature. But, the most immature of all are the Apple fanatics.
            adornoe
    • Surface Pro

      Microsoft has a homerun with Surface Pro. The new Intel chips will definitely extend battery life. With the real keyboard and Office it fits well on the airline fold-down tray. It is a great business tool.
      samp_z
      • Agreed.

        I use my Surface Pro while I am doing presentations with a lot of PoC codes built while meetings are going to support my Architecture guidance.
        Ram U
      • Microsoft is running out of time

        Sure, they missed out on the shift to 7 - 8 inch tablets, but even sales of the standard ipad have collapsed this year, so we'll let that slide.

        If the Surface 7+ is not hit, then there are no more excuses. That means that people don't really need MS Office on a consumer tablet and do not see value in a Microsoft ecosystem short of full blown windows.

        If Microsoft wants to stay in the small tablet hardware business, they should do a fork of Android and pay themselves patent royalties. LMAO.
        SunFire23
      • Nah...

        It's just an expensive toy. For the same price you get a decent MacBook Air with twice the battery life, a REAL keyboard and a better form factor.

        If you check the numbers, it's just a fringe device for the very rich (and STUPID).
        cosuna
        • If you check the numbers, it's just a fringe device for the very rich

          (and STUPID).

          I'm pretty sure that, that's no way to refer to the Mac, and I'm sure Apple is not appreciating your efforts.

          ;)
          adornoe