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Analysts are now lowering their future sales forecasts

As iOS and Android-powered tablets continue to be trailblazers in the market, Microsoft's Surface is having a hard time finding its place -- and it shows in analyst expectations.

Bloomberg source anonymously revealed that Microsoft has sold 1.5 million Surface tablets to date. More specifically, the company has sold a little over a million Surface with Windows RT tablets (features the Windows RT version of Windows 8 specifically for ARM processors) and about 400,000 Surface with Windows Pro tablets (features the full version of Windows 8 and an Intel Core i5 processor). 

These numbers are not exactly what analysts expected this late in the game. Brent Thill, an analyst at UBS AG, had previously predicted that Microsoft would sell 2 million Surface RT tablets in just the December quarter.

Now, analysts are lowering Surface shipment estimates for the current quarter and beyond. Brendan Barnicle, an analyst at Pacific Crest Securities, lowered his Surface sales projections from 1.4 million to 600,000 for the current quarter.

Barnicle also reduced his Surface sales estimate from 7 million to 5 million for fiscal 2014. Rick Sherlund, an analyst at Nomura Holdings Inc., decreased his estimate for the PCs and Windows-based tablet market from a growth of 5 percent to a decline of 1 percent.

Why is the Surface such a flop so far? Reports cite consumer unfamiliarity with the Windows 8 OS, Surface's fail at successfully packaging the power of a PC combined with the ease-of-use of a tablet, and fewer apps as some reasons. A high price point would be a fair reason as well (the Surface RT is $499 for 32GB and $599 for 64GB while the Surface Pro is $899 for 64GB and $999 for 128GB).

Currently, the Windows Store has a little over 47,000 apps. Apple's App Store has over 300,000 apps for the iPad. In the quarter ended December 2012, Apple sold 22.9 million iPads and it accounted for 51 percent of the tablet market.

However, Android tablets are expected to give the iPad a run for its money this year. According to IDC, iPad shipments are expected to make up 46 percent of the tablet market for 2013, down from that 51 percent in 2012. Android-powered tablets are expected to increase their market share to 49 percent in 2013, up from 42 percent in 2012.

Back in December, Boston-based brokerage firm Detwiler Fenton said that Surface's main problem was distribution. Customers could only buy the Surface with Windows RT tablet at Microsoft Stores, and the issue with that is there's only 31 of them, with another 34 smaller Microsoft kiosks around the U.S. The lack of exposure at places like Best Buy and Staples was hurting the tablet after its Oct. 26 release.

This was resolved later in December, when Microsoft started allowing third-party retailers to sell the Surface -- near the end of that quarter.

Source: Bloomberg

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But seriously...
By Motoman on 3/15/2013 11:09:43 AM , Rating: 3

$163 for a 10.1" Android tablet and a keyboard/folder case. Boom - instant "Surface" tablet, that does everything that 99.99999% of all people want/need to do with a tablet, for nearly $340 less. You could buy 3 such Android tablets and keyboard folders and still have money left over for lunch compared to a $500 Surface.

Issues with the OS aside, that's why people aren't falling over each other to buy the Surface. Why would you?

RE: But seriously...
By MadMan007 on 3/15/2013 11:22:00 AM , Rating: 2
There have been cheap tablets for a long time now, and I don't mean cheap just in price, that's certainly one of them. And yet other tablets still continued to sell well so it's not just about price.

RE: But seriously...
By Da W on 3/19/2013 2:14:18 PM , Rating: 2
400000 Surface Pro in 1 month since in on market, not bad for a 999$ tablet actually!
Of course cheap sells. There are many more McDonald's dollar value burgers sold in the world than expensive 5 services meals at a 200$ restaurant.

Where are the Acer/Asus/Samsung tablet sales numbers? We should combine all Clovertrail/corei3/cCorei5 with Windows 8 pro sales. Game is still Young, i know many more people without a tablet than people with a tablet.
Where are the android full numbers? not just 42% market share crap.
Written from my surface pro attached to my Bluetooth 5500MX revolution combo and LG 27'' screen. Used as a full office computer.

RE: But seriously...
By Labotomizer on 3/15/2013 11:31:41 AM , Rating: 2
I'm buying a Surface Pro with my 1st quarter bonus. While the RT didn't seem that interesting, there really is no comparing the Pro to other tablets on the market. It's a far more capable device and, with RDP back to my home workstation, is fully capable of replacing my mobile workstation. That's pretty impressive if you ask me.

RE: But seriously...
By Motoman on 3/15/2013 11:33:52 AM , Rating: 5
You realize that close to no one, when looking at the market as a whole, has any idea what RDP is, right?

As for being a "more capable" device...the vast majority of tablet users use their tablets to surf the web, troll Facebook, and play Angry Birds. It wouldn't matter what else the thing is capable of, because it's irrelevant.

RE: But seriously...
By synapse46 on 3/15/2013 11:35:22 AM , Rating: 2
I was going to suggest get the RT and use VNC. Assuming the windows app store has a VNC app.

RE: But seriously...
By Motoman on 3/15/2013 11:47:01 AM , Rating: 3
RE: But seriously...
By eek2121 on 3/15/2013 11:53:46 AM , Rating: 2
Yep, i was going to suggest pocketcloud pro for Windows RDP connections. I have it and it works great. There are plenty of RDP and VNC apps out there. I find the Windows 8 devices to be useless without most the apps that I use being available. Things such as spotify don't have native Windows 8/Windows RT support.

RE: But seriously...
By Nortel on 3/15/13, Rating: 0
RE: But seriously...
By AstroGuardian on 3/15/2013 7:28:43 PM , Rating: 4
They didn't change everything, they just added one more touch friendly desktop (Metro).

Have you even seen Windows 8?

RE: But seriously...
By BSMonitor on 3/15/2013 2:05:38 PM , Rating: 1
Free in this case = JUNK.. AKA Android's MO

RE: But seriously...
By Motoman on 3/15/2013 2:54:12 PM , Rating: 3
Um, no...actually Teamviewer is pretty awesome. And it's integrated into lots of other applications now as an OEMd remote access app.

Not junk at all...either in terms of Android, or in terms of Teamviewer.

RE: But seriously...
By Mint on 3/15/2013 9:47:21 PM , Rating: 2
RDP with an inductive stylus is amazing. You get much better accuracy and visibility than with a finger (or cap stylus), and can right-click using the button.

If you want a substitute for the Surface Pro, it'll have to be a Note 10.1/8.0 or one of the better Clovertrail tablets, and there will be some sacrifices.

RE: But seriously...
By dew111 on 3/15/2013 1:20:41 PM , Rating: 2
Windows RT has RDP, I've used it myself. It works pretty well.

RE: But seriously...
By dgingerich on 3/15/2013 11:47:55 AM , Rating: 4
I recently got a Dell XPS 10. (Far more capable WinRT machine than Microsoft's.) I use it for a lot more than that, so far. I use it at work for remote access to the KVMs in my racks, email, retrieving documented data, (it really has too small of a keyboard to edit documents on any regular basis) call up server reports and other remote administration, remote desktop to servers, Angry Birds, reading ebooks on Kindle and Nook apps, and finally surfing the web.

The dual core Qualcomm chip in the Dell is a far better choice than MS's choice of a Tegra 3. Tablets are mostly dealing with simple, single threaded apps, and a dual core with faster single threaded performance is far better than relying on multithreaded performance.

Honestly, MS made a few missteps with the Surface, but the OS isn't one of them.

RE: But seriously...
By Motoman on 3/15/2013 12:26:18 PM , Rating: 2
...I'm sure you do. And what percentage of the general user base do you think you represent?

People on DT have to remember that they're the 1%ers...or less.

To envision the *actual* market for such devices, you have to remember these are the people who can't manage to program the clock on a VCR. Not that anyone remembers what a VCR is anymore.

Imagine what your grandma would do with a tablet. That's what the market is.

RE: But seriously...
By BSMonitor on 3/15/2013 2:11:35 PM , Rating: 2
Not really sure what your point is in this thread. MS stock price isn't on the line when talking about Surface... They sold fewer than Android or iOS tablets...

And? They are not going to stop building them. And they will continue to put out the only tablet with legacy x86 support, and that alone makes it worth more to a lot of people than anything "free" from Google.

RT is a kneejerk reaction to pressure Intel to get Atom where it needs to be.. The ONLY tablet I would consider for doing anything useful is a Win 8 tablet with Atom or Core i7..

RE: But seriously...
By Motoman on 3/15/2013 2:55:58 PM , Rating: 2
The obvious point that you can't see is that Surface is trailing sales expectations by a wide margin.

I'm offering one explanation for it...the VAST majority of tablet users can do everything they want, and more, for 1/3 the cost of a Surface.


Not hard to see the point I'm making.

RE: But seriously...
By Mint on 3/15/2013 10:31:01 PM , Rating: 3
The point everyone else is making is that these trailing sales really don't matter. MS is in it for the long haul.

x86 tablets are the future.

RE: But seriously...
By nikon133 on 3/17/2013 11:13:07 PM , Rating: 2
I'm of the same sentiments, especially with Clover Trail tablets.

Here in NZ, CT Windows Pro tablets are not much more expensive than Androids, and offer best of both worlds - size, weight, battery life of iPad or Android, with extra functionality of PC.

But considering how much time took for Android tablets to start selling, while competing only with iPads, it is easy to predict that it will be even harder for Windows tablets - they compete with both iPads and Androids, after all.

So I'm not really discouraged with slow WinTab sales; in fact, I'd really be surprised if they were amazingly good. They have great uphill to overcome, but I believe they will get there. Only thing is, I think their entry point will be through enterprise, rather than consumer market. Businesses will start taking them in for obvious advantages, and that, in return, will give people chance to get firsthand experience with WinTabs and chance to like them, thus selecting them later on for their homes as well.

RE: But seriously...
By dgingerich on 3/18/2013 5:13:26 PM , Rating: 2
Actually, what I was saying is that I found much more capability and use out of this tablet than I originally anticipated. In addition, WinRT is far more corporate security capable than either iPads or Android tablets. I'm betting if more people were to actually try it, they'd find more use than they would have guessed, and they'd be happier than they would be with other tablets, especially in corporate environments. WinRT is far more advanced and capable than the other tablets out there, and it is worth the price.

Now, if the stupid critics who have no idea what they're talking about because they haven't actually used Win8 or WinRT would just shut up, people would likely try these WinRT tablets more often and tablets in general would catch on.

RE: But seriously...
By Griffinhart on 3/15/2013 1:28:33 PM , Rating: 3
And the target of the Surface Pro isn't a part of this "Vast Majority" you mention. It's for people like me that want to carry a single device to replace a consumer tablet and a windows laptop. The Surface Pro fits the bill perfectly. It's extremely portable, extremely powerful, lets me run all the actual windows Apps I need, use it as a work machine, and I can still to tablety things with it.

Just because the "Vast Majority" doesn't need it, doesn't make it an undesirable device.

RE: But seriously...
By johnnycanadian on 3/15/2013 1:33:28 PM , Rating: 2
You won't regret it! I picked a 64GB version up about a month ago; it really lets Windows 8 Pro shine. LOVE the pressure-sensitive stylus (with Autodesk Sketchbook Pro) and aside from a few applications (FileMaker Pro 12 doesn't activate the onscreen keyboard automatically in a text field for some reason), everything works well and FAST!

Really impressed with it -- I use it more than my Sammy Chronos 7 17" laptop at this point. I gotta recommend you go with the 128GB version, though. Using a 64GB SD as secondary storage kind of takes away from the experience; wish I would have waited until 128GB units were readily available.

RE: But seriously...
By nafhan on 3/15/2013 2:11:01 PM , Rating: 1
Uhm, RDP is a terrible use case for explaining why you need Surface Pro! If you need to RDP back to your workstation to do stuff, then an Android tablet + workstation would work just as well.

The point of Surface Pro is that it's your primary computer, and you should not need another workstation - at all.

RE: But seriously...
By Labotomizer on 3/15/2013 3:47:54 PM , Rating: 2
I'm a Systems Engineer with a high requirement for virtualization. My current "laptop" is a 17" Elitebook mobile workstation with 32GB of memory running VMware Workstation with numerous VMs for various activities, including labs, demos and proof of concepts. The Surface Pro can replace everything about my laptop except for that. Fortunately my home workstation can do all of that, and even better than, my laptop can currently.

So you're right, RDP is a poor explanation since I didn't go into detail. But since I can do presentations, get good battery life, and dock it at the office and use it as my full time work system it's a perfect device. For me.

No other tablet can do that the way the Surface Pro can. I'm not saying that the iPad and Android devices don't meet a lot of people's needs, I get that they do. They don't meet mine however. And I've tried.

RE: But seriously...
By nafhan on 3/18/2013 4:10:18 PM , Rating: 2
So, it sounds like you are using it as your primary computer and doing a lot of Windows specific stuff locally. That's pretty much the ideal situation for a Surface Pro (if size/portability is important).

I also agree that "laptop" should be in quotes regarding your workstation. :) In my situation, I'm able to run that kind of thing remotely, and I prefer to keep it that way!

RE: But seriously...
By Taft12 on 3/19/2013 10:57:14 AM , Rating: 2
I'm a Systems Engineer with a high requirement for virtualization.

If this is the requirement to have a use-case for the Surface Pro, it's no surprise that there have only been 400K sold.

RE: But seriously...
By kleinma on 3/15/2013 5:48:22 PM , Rating: 2
The point of the surface pro is not that it is your primary computer. That is like saying if you own a laptop you should not own a desktop because the laptop should be your primary computer.

I am a tech guy, but I have a desktop at home, a desktop at my office, and the surface pro as my laptop (which replaced a several year old actual laptop). I can RDP around to and from wherever I need to.

RE: But seriously...
By Luticus on 3/18/2013 8:37:49 AM , Rating: 2
The point of Surface Pro is that it's your primary computer, and you should not need another workstation - at all.

LIKE HELL! No tablet in todays world could EVER replace my main workstation. A tablet is a bonus machine, that is all. That said, I'd take an x86 windows 8 tablet over any other platform on the market... why, because I view them as Laptops without keyboards. The are low end PC's with touch screens instead of keyboards. They are NOT angry birds machines like some people would like. I know I don't represent the vast majority of users out there but I do represent a sizable market. You say it's 1% I say it's more like 10 - 20%. Otherwise companies that build high end PCs and computer components wouldn't exist. They would only build for the low to mid range systems. I find it a bit sad that people don't see high end tablets as viable because the rest of the world just wants to shoot pigs with birds and touch porn on the Internet with their finger. Tablets are not giant phones, they're computers. This is NOT a post PC world.

RE: But seriously...
By robinthakur on 3/15/2013 2:22:19 PM , Rating: 2
We got two HP win 8 pro devices (i use the term pro loosely, they are Intel atoms!) to try out at work this week and user feedback was overwhelmingly negative so we won't be buying them to replace our hundreds of iPads. On full screen apps, the keyboard works quite well. On desktop apps? It takes up half the screen and you can't see the text box you are typing into (eg google). Other than office integration, this doesn't seem to add much. A shame, as people were initially quite enthusiastic at the unboxing, and being able to have a USB connection dongle is quite nice, although it feels suitably retro after having devices for so long that don't need them. We requested surface pros but MS couldn't find anywhere to supply them to us in the UK within 2 days.

RE: But seriously...
By Reclaimer77 on 3/15/2013 5:16:42 PM , Rating: 2
I have a hard time looking at the Surface Pro as a "tablet" though. It's basically a touch Ultrabook/slate PC in a really thick tablet form factor kinda sorta not really mutant thing.

Which is good. MS should keep distancing it from "tablets" because, well, you don't see any other thousand dollar tablets out there do you?

RE: But seriously...
By fteoath64 on 3/18/2013 6:39:01 AM , Rating: 2
There are plenty of RDP like solutions for iPad and my mini can do that with its 320gm weight and 10 hours of battery for most tasks even light video editing, so why go PRO and paying 3X the money ?.

The level of compromises for each user comes in many different angles and other could wrestle out nice software tools to make things a lot easier than a traditional notebook. So for many it becomes tablet and Desktop only solution and the notebook is left to dry (obsoleted).

RE: But seriously...
By synapse46 on 3/15/2013 11:34:15 AM , Rating: 2
I've been looking at getting $300 Asus tablet with the tegra3 chipset, I figure that is about the best tablet for the $$ but I have yet to be so inclined to make the purchase.

I played around with a surface, and unless you had a specific business program that would require the pro version, I couldn't see they value. The RT has some additional features that are nice, but for the average user it is too expensive and too bulky, IMO. Also, the surface keyboard that is like a "glorified microwave keypad" seems useless to me. I have also seen another surface with a more netbook style chiklet keyboard that would probably be more useful.

RE: But seriously...
By dgingerich on 3/15/2013 11:58:28 AM , Rating: 2
I HIGHLY recommend the Dell XPS 10 instead. It uses a Qualcomm dual core Snapdragon S4, which is much faster on single threaded apps, which is mostly what happens on tablets. Plus, the keyboard dock has an extra battery, giving extended battery life.

I use it in tablet mode when playing Angry Birds or reading Kindle books, but switch to netbook mode (docked) when using it at work for documents, email, and server remote consoles.

RE: But seriously...
By jeepga on 3/15/2013 1:38:13 PM , Rating: 2
More than 0.00001% of the population is interested in content creation. So your number is just hyperbole. But, the point is otherwise valid. That pretty much applies to your later comment about RDP.

Here are my thoughts. I was ready to buy the Surface Pro even at $1,000. But that was only true after using it. I still really want one. I'm annoyed with the cost of the type cover. But, what pushed me away was the battery. I didn't expect a great battery with all of that power. But, not that piss poor. And the straw was that the battery cannot be replaced.

RE: But seriously...
By kleinma on 3/15/2013 5:43:31 PM , Rating: 2
Surface Pro is an awesome device. It is expensive, but it is an ultrabook that doubles as a tablet, not a tablet that doubles as a pseudo half baked laptop.

The touch cover is crap, the type cover is required if you want to do any real typing on it. The combination of mouse/keyboard/touch is awesome to have.

It is only going to appeal to those who need to do real windows work, not to those just looking for a tablet to watch HBO GO and netflix on.

RE: But seriously...
By lawrance on 3/17/2013 11:14:25 AM , Rating: 2
If you need a tactical keyboard, a mouse or trackpad, then why buy one of these at all? Why not just buy a real laptop that has considerably more power? I really think MS is missing the point of tablets. Thin, light, inexpensive but great for consuming content on the road or on the couch. Dedicated professional apps make tablets great for business use out in the field too.

RE: But seriously...
By KaiTech on 3/16/2013 5:20:46 PM , Rating: 2
Well I wonder what they are thinking, I live in Luxemburg, in the heart of Europe, and we only got Surface RT like 2 Weeks ago into the retail stores. I asked the guys in the stores when they expected to get Surface Pro, and they had no clue when it would be available.

Availability is a very big issue with all Win8 products, I really don't get it.
They hyped up the launches of Win8 Tablets and Phones and they are available no where! That's a big part of the problem!

Another example is the Nokia Lumia 920, when was that announced? ...almost 6months ago?! ...and we still don't have it available anywhere?!

Next example would be the Asus Transformer Book (Win8 version), available no-where, eaven though it's been announced a very long time ago....

No wonder sales don't meet expectations with those issues ... I mean I know lots of people that would like to get their hands on those devices... but not possible!

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