Friday24 March 2023

Further analysis of Surface sales

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Microsoft proudly unveiled Surface tablets during the launch of the new Windows, even though many said that the release of devices with a completely different processor architecture (ARM) was a very risky move. Although the team from Redmond repeatedly declared that they are satisfied with its initial sales, the two figures released so far appear at odds; Microsoft’s figure of 4 million tablets planned for the 4th quarter is now reduced to 2 million. Now a brokerage firm, Detwiler Fenton, that allocates brokerage ranks, said that Microsoft should be happy if they manage to sell 1 million tablets by the end of the year. Detwiler says that Microsoft has sold between 500 and 600 thousand units so far.

These figures also point out something rather bizarre. Specifically, Microsoft said that all of its 90,000 employees received a complimentary Surface Tablet, which means that their employees could cause losses in the fourth quarter due to poor sales. In any case, it now becomes apparent that sales of Surface tablets will be below all expectations. Detwiler says that Surface has a poor sales strategy and "visibility", given that the tablet can only be ordered online through the Microsoft Web site or Microsoft retail stores and that without access to Best Buys, Staples or Wal-Mart they will not be able to achieve better results.

In addition, analysts believe that the major role in the weak sales is price. Since they have a tablet that costs $499 and to get the Touch Keyboard Cover you have to pay another $100, Windows users complain that this is not a fair price because they have the feeling that someone is selling them a notebook without a keyboard. According to Detwiler the keyboard should be included in the price of $499, if not less, because there is space for lowering the price. According to iSupply making the low-end surface costs $284 and the Touch Cover $14-18. As they say, if Microsoft launched the Surface (with Touch Cover) at a price of $399, they could have had a "killer product" Instead at $499 people prefer a pretty solid notebook instead of a tablet, which they can get without a doubt.

[Ed – There is a similar feeling with some of the Ultrabooks on the market. Many feel that the costs are not justified because you are not getting the same level of hardware or performance and the weight savings is often less than a pound. Microsoft priced themselves into a corner with Surface and could end up doing the same with the Surface Pro when it comes out next year…]

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Last modified on Monday, 10 December 2012 21:11

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