Just one million Surface RTs sold?

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.
Written by Liam Tung, Contributing Writer

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

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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.

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