Microsoft Surface sold fewer than 1 million units in Q4 2012

By on January 14, 2013, 6:00 PM

It appears sales of Microsoft's Surface RT tablet may have only performed half as well as analysts expected during Q4 2012. Industry researcher Brent Thill of UBS said that Microsoft only sold about one million units -- that's one million short of the firm's earlier forecast. Another analyst is estimating sales even below one million, but Microsoft has yet to weigh in with its own official sales numbers.

One million is a big number and certainly a success by most standards. However, to add a little perspective, one million units is about five percent of Apple's iPad sales during the same period.

By Microsoft CEO Steve Ballmer's own admission, initial Surface sales were "modest". Thill summed up reasons for Surface's lackluster sales succinctly, "Surface RT is a consumer device with sales suffering from the difficult iPad compare and narrow distribution." However, the analyst expects better numbers from the more expensive Surface Pro, a non-RT Windows 8 tablet which hopes to find a home somewhere between tablets and ultrabooks.

Surface's tepid debut was largely attributed to its limited distribution channels -- Microsoft stores -- and not necessarily lack of customer interest. In fact, Microsoft seemed to frequently sell out of Surface tablets, a fact which certainly didn't help sales figures. Microsoft's narrow distribution channel though, was likely fueled by the software maker's second issue with Surface: limited production capacity arising from partner limitations and Redmond's exacting specifications.

Despite modest sales, Microsoft purportedly still found itself needing to halve production merely a month after launch. This was probably the first tell-tale sign that Surface sales would be about half of industry expectations. At the time, IHS iSuppli speculated Microsoft may sell 1.3 million units during Q4 -- maybe. It appears IHS' then-conservative figures may have still overshot Surface's success.




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1 person liked this | TomSEA TomSEA, TechSpot Chancellor, said:

Should have just gone with the Surface Pro and be done with it. At least they would have had a puncher's chance at making a dent on the iPads. I can't believe they moved a million of those things.

5 people like this | Littleczr Littleczr said:

My jaw just dropped when I read that they did not have enough distribution channels. Microsoft is clueless with its target audience. The reason the surface doesn't sell is because its freaking expensive. With the cost of the surface I could buy something more mature like an iPad or android tablet.

Like tom said the surface pro sounds more feasible, but if I would consider buying this surface pro I would much rather buy a laptop.

Microsoft has to be the dumbest company out there.

6 people like this | howzz1854 said:

Maybe because it's EXPENSIVE?

2 people like this | Vrmithrax Vrmithrax, TechSpot Paladin, said:

Look at it from a semi-informed consumer point of view... Just another tablet in an already crowded tablet market. Sure, the packaging is slick, with the flipstand and click on keyboard, but... Very limited launch library of apps, and if you are already an iPhone or Android phone user, you can have some crossover and familiarity with apps. It was behind the 8-ball to begin with, uphill climb all the way. Looks like they lost a few Sherpas along the way up.

1 person liked this | Guest said:

Microsoft wants to jump into the tablet market and gain public interest in their tablet, they releases a table more expensive than their well developed competitor.... Smart?

2 people like this | MilwaukeeMike said:

It's not that expensive for what it is. It's $630 for a Surface with the nice keyboard and if you want a iPad with 32GB it's $600 as well. The Surface has less available space but does have a card reader. Either way... when you're spending over $500 on a tablet, you want the right one, and you want to buy it once and use it for a long time.

They should have done a lot more to market it as a productivity tablet. They show little flashes of Excel and word and powerpoint at the very end of their commercials. Those things should be front and center. Show the screen close up doing email, excel, reports, etc, then zoom out as the cute saleswoman snaps off the keyboard and collapses the kickstand before getting on the plane. Or do that with a kid on a college campus before class... who knows, but skip the dancing. People aren't going to buy it to slide tiles around.

They should have sold them sparingly at normal retailers. Let Best Buy have a couple, so they put one on display and get the free advertising when people compare tablets.

3 people like this | psycros psycros said:

They should have done a lot more to market it as a productivity tablet. They show little flashes of Excel and word and powerpoint at the very end of their commercials. Those things should be front and center. Show the screen close up doing email, excel, reports, etc, then zoom out as the cute saleswoman snaps off the keyboard and collapses the kickstand before getting on the plane. Or do that with a kid on a college campus before class... who knows, but skip the dancing. People aren't going to buy it to slide tiles around.

They should have sold them sparingly at normal retailers. Let Best Buy have a couple, so they put one on display and get the free advertising when people compare tablets.

Nailed it. Ballmer inherited his old boss's obsession with imitating Apple. Problem is, Apple is successful because it has the press, Hollywood and zombie followers on its side - the fact that its products are simple to use and (to some people) attractive is secondary. Microsoft made its fortune by catering to the mass market and being ubiquitous. Setting up "Microsoft stores" and trying to generate hipster loyalty is stupid beyond belief. All they've managed to do is alienate their most loyal customers. If they'd had any brains they'd have made Metro/RT a mini-OS that booted up <I>before</I> Windows 8 even loaded. If you needed more than simple apps on a pure touch UI you could go to the desktop, and of course have the option to boot <b>directly</b> to the desktop on boot-up. Why is Ballmer the only one who can't see the simple logic here?

St1ckM4n St1ckM4n said:

People would be willing to hop on over to a new market platform if they could play all their cheap games like Angry Birds and Temple Run. Since the marketplace is empty, there's nothing to jump on over to.

Guest said:

Microsofts' biggest mistake was releasing Windows 8 for desktops. Windows 8 on the desktop has gotten so much bad press and feedback, rightly so, that people are probably afraid that the pitiful Windows 8 desktop experience will translate over into a pitiful tablet experience.

Life isn't always about what it is, but what is perceived or believed.

Microsoft, you should have NEVER released Windows 8 for desktops. There was simply no reason. They should have released Windows 8 on their tablets only, called it something else to cut down on consumer confusion, and released a modified version of Windows 8 for desktop at a later time. This could have worked. I guess they just couldn't be bothered with tailoring different versions of their OS to different niches of people. Oh well, you live and learn, right?

I guess Microsoft wasn't around when Coca-Cola thought it would be a good idea to come up with a brand-new taste for the most popular drink around(at the time) and then market is as the same product. How stupid can one company be? It amazes me how Microsoft has made it this far when I contemplate the fiasco that is Windows 8. Unbelievable.

VitalyT VitalyT said:

As an IT professional who has been relying on Windows Desktop for 15 years I got just one thing to say to Microsoft about Windows 8 - take that in your pipe and smoke it!

With the main OS provider running amok the entire industry is in for a long suffering.

Guest said:

Another fire sale?

1 person liked this | VitalyT VitalyT said:

Another fire sale?

One as in Die Hard 4?

1 person liked this | soldier1969 soldier1969 said:

Could be Windows 8 the problem...you think?

R3DP3NGUIN R3DP3NGUIN said:

If I do recall correctly, at one point you could only purchase a Surface RT through MS stores or online. That was a stupid move to begin with. In Australia there is so much advertising for Surface, but up until recently you could only purchase it online.

It was kind of funny, people would talk about the Surface but then wonder "where are they", "no shop sells them".

Xclusiveitalian Xclusiveitalian said:

A lot has to be do with the new OS, and ofcourse Price tag. This baby is expensive, and I mean like jokingly expensive. For a tablet? I don't think so. There is a lot of uncertainty about windows 8, especially changing the layout. I mean even with Apple selling, there OS market percentage is nowhere near windows, and yet windows decided to change it. People like what they like and windows is more popular, liked, and used. That being said this baby needs to be cheaper...way cheaper. Don't pack that baby with so much power if it's going to be that expensive, just make sure its fast on what it's running and affordable. Apple products are expensive, be the affordable option and you will sell reguardless.

St1ckM4n St1ckM4n said:

If I do recall correctly, at one point you could only purchase a Surface RT through MS stores or online. That was a stupid move to begin with. In Australia there is so much advertising for Surface, but up until recently you could only purchase it online.

It was kind of funny, people would talk about the Surface but then wonder "where are they", "no shop sells them".

Yeah, they arrived very late and no no fanfare. The tablets are just stuck with the rest of the other lame tablets. Nothing to make them stand out, at all.

Guest said:

Remove the start menu, add squares and no one will buy it. That is the problem.

PC EliTiST PC EliTiST said:

"People this", "people that" -I see many professional analysts around, as usual. Not that the real professional analysts can be more valid, but anyway.

I still don't see why me or possibly others should bound their lives with one ton of devices, like PC, Laptop, Smartphone and Tablet... Obviously, there are too many options. Chose 1 or maximum 2 and discard the leftovers. What would you, now, in 2013? I'll try first... PC & Smartphone. If I was a student or needed something more specific for my job, Laptop and Smarthphone. So... I still fail to see why I need this tablet thing. None I know in my family/friends/co-workers and even known or unknown people around where I move, have ever even talked about a tablet. On the other hand, about smartphones, many.

Well, you might know better, but tablet is a luxury item that not many will keep following like it's the next best thing after sliced bread.

And as you said, MS came with an expensive device that was the main reason Windows changed its focus from PC to Tablet. In short, they've broken my UI. Bastards :P

R3DP3NGUIN R3DP3NGUIN said:

"People this", "people that" -I see many professional analysts around, as usual. Not that the real professional analysts can be more valid, but anyway.

I still don't see why me or possibly others should bound their lives with one ton of devices, like PC, Laptop, Smartphone and Tablet... Obviously, there are too many options. Chose 1 or maximum 2 and discard the leftovers. What would you, now, in 2013? I'll try first... PC & Smartphone. If I was a student or needed something more specific for my job, Laptop and Smarthphone. So... I still fail to see why I need this tablet thing. None I know in my family/friends/co-workers and even known or unknown people around where I move, have ever even talked about a tablet. On the other hand, about smartphones, many.

Well, you might know better, but tablet is a luxury item that not many will keep following like it's the next best thing after sliced bread.

And as you said, MS came with an expensive device that was the main reason Windows changed its focus from PC to Tablet. In short, they've broken my UI. Bastards :P

I can agree with your post, I personally have never owned a tablet, I still cant get over the expensive "toy" mind-set of these rather restrictive gadgets (Apple/Android). I currently have an MSI U270 netbook that I would like to upgrade, I am looking at the Surface Pro and or Transformer Book though. Simply because I get the best of both worlds (so to speak), I see my usual desktop for home use and the tablet or convertible, for business as usual.

I honestly love Ubuntu's phone, that can enable full desktop experience. See if I could get a Lumia the same size as the Galaxy Note, that once docked could enable full Windows 8, I probably wouldn't reach for my laptop as often and wouldn't even think about a tablet. Obviously Win 8 isn't for everyone, I cant stand it on a desktop (4 monitors with 8 doesn't feel right), but with my laptop its great. Only took 15mins to suss 8 out.

Guest said:

Too expensive, compared to other tablets. Lack of apps is killing all the Windows stuff right now, they got in the game late and are now paying the price(well expecting customers too).

Guest said:

It seems Microsoft made some major errors:

Windows 8 was built around the consumer tablet market - Upsetting their core market.

They attempted to become an Apple clone with Surface RT/App Store, etc. - Not their core market.

They don't lead, only follow.

Guest said:

It is doing just as good as Kin.

Show people dancing and a little girl drawing pictures that drain the ink out of the printer.

Guest said:

When consumers hear the word tablet they instantly think of Apple iPad.

Microsoft not caring about their own products at the recent CES and not providing any help to their partners is not a good sign.

Guest said:

Mostly, consumers are waiting for pro version..

captaincranky captaincranky, TechSpot Addict, said:

The only ad campaign on TV worse than M$'s dancing fools for the Surface, are the dancing a**holes of "We Buy Any Car.com.

But sadly, it isn't by much. They're probably from the same ad agency. Or a bunch of stiffs they picked up by referrals from Washington State Unemployment.

As for the Surface, the credit cards stay safely in the wallet, and the TV remote's "mute" button, stays ever at the ready.

As for, "webuyanycar.com", they get the channel changed immediately by, "posthaste.org/pronto"

davisjaron said:

Here's my opinion on why it didn't do so well:

First, most people want the Pro version, not the RT version. People don't want a "full windows experience" without the "full windows experience." Only being able to install apps from the microsoft app store cuts the usefulness of the tablet.

Second, lets be honest, this tablet is expensive. The market is going for the most powerful low price tablet. The windows tablets, while fairly powerful, are not inexpensive by a long shot. They are the price of a full fledged laptop, or more expensive in many cases. For the price of the tablets, most customers would prefer a laptop with windows 7.

Last, the tablet experience is great, but the general market isn't your standard tech savvy person who knows what they want. The majority of the market will want to have hands on experience with something before they buy it. Being that the official windows tablets are only sold through microsoft stores, generally speaking, the standard person won't buy it.

avoidz avoidz said:

Too expensive and too late to the market. Pro is the only one worth getting, and at those high dollar prices a laptop is a better choice.

Julien Julien said:

I am not surprised on the # of surfaces sold. These products were virtually no-where in major retail stores across Canada up until a few weeks ago. Now I am finally seeing them in big box stores. I hope they do well, they are well made and gorgeous products.

ViperSniper2 said:

My jaw just dropped when I read that they did not have enough distribution channels. Microsoft is clueless with its target audience. The reason the surface doesn't sell is because its freaking expensive. With the cost of the surface I could buy something more mature like an iPad or android tablet.

Like tom said the surface pro sounds more feasible, but if I would consider buying this surface pro I would much rather buy a laptop.

Microsoft has to be the dumbest company out there.

Sorry, but being the largest software company in the World, who's Market Cap once exceeded Apple's certainly doesn't make them "DUMB"!

Remember there were NO Windows 8 Devices, let alone Microsoft Surface products not even two months ago. Even Apple's iPhone took awhile in a highly competitive market to get established. Their iPads got the old fashioned Big Brother Push off for it's success. Microsoft is so lucky in that regard. But... it only takes a modicum of intelligence to see this could all change very fast and why in the World should Microsoft turn to giving their products away so early in the game?

Sorry..... but I still have many friends who are planning to buy Windows 8 Tablets and they include some who are more interested in having full desktop productivity, rather than a purely consumption device! ....and I'm also one of those people who'll stretch my Windows 8 Free Ride out as long as I can before throwing down my cash to finally make a purchase! .....so come next month, we'll see Real Buyers coming out of the woodwork before the discounts get killed! ;-P

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