Microsoft plans to sell 3 million Surface tablets in 2012. Too few or too many?

An IDC analyst says the production target means the slates won't only be sold in Microsoft retail stores.

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IDC analyst Bob O'Donnell recently told our sister site CNET that Microsoft is gearing up to produce 3 million Surface tablets -- primarily the Surface RT flavor powered by ARM chips, due on October 26, and not the Intel-based Windows 8 Surface version, due a couple of months later -- by the end of the year. Is that number wishful thinking or too conservative?

While 3 million seems like a hefty target, it may actually be low-balling demand a bit. In an interview with Wired magazine, Forrester analyst Sarah Rotman Epps points out that Amazon sold nearly 5 million Kindle Fires at the end of 2011. In comparison, Apple reported 17 million iPads were sold in its 2012 third quarter.

Epps tells Wired that this may be a case of Microsoft purposely under-promising, though it may also factor in that Windows 8 tablets will be sold by other manufacturers. While they may not be pleased that they are competing with Microsoft, a number of major brands like Dell, Lenovo, and Samsung plan to build Windows 8 tablets in various flavors.

O'Donnell is skeptical that Microsoft will wind up selling the Surface RT at an eye-popping $199 price point -- though he says the company could do that via subscription fees a la its recent Xbox promotion -- but he does believe that the 3 million production target means one important thing. That amount is far too great for the company to sell just through the handful of Microsoft retail stores: "You can’t build that many products without having a much wider distribution strategy." (Then again, Google has done well selling most of its Nexus 7 tablets through its online store.)

In addition to the Nexus, Microsoft's new Surface RT tablets will be launching around the same time that new Kindle Fires and a mini iPad could be available. While those are smaller slates, they will take some focus away from the Surface debut -- what appear to be conservative production numbers may reflect the ultra-competitive tablet market Microsoft is jumping into.