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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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Metro has failed on all fronts.
By 91TTZ on 3/15/2013 11:57:22 AM , Rating: 1
Microsoft's Metro initiative has failed on all fronts. Early implementations of it were the interfaces for the Zune and the Windows phone. Both were failures. While those products failed, Microsoft decided to go all-in and make a big push for Metro. They decided to design their entire ecosystem around the Metro interface.

Windows 8 implements it all throughout, and Windows 8 is tanking. Microsoft decided to renew their push for the Windows Phone 8 and that is tanking as well. Surface implements it and that's dead in the water as well.

While Microsoft is making it sound like they're fully behind their decision and that their products are doing well, behind the scenes that company must be in crisis mode. The main profitability that they currently have is from people buying their older products. All the recent research and design resulted in products that people simply don't want. Their push for the future is leading nowhere, with no help in sight.

They claimed that Metro is Microsoft's future but I can't imagine a company holding onto a "future" that their customers are rejecting. It's as if they noticed the recent popularity of mobile devices and daftly extrapolated the direction of computing based on that rather than thinking about things analytically and calculating where things would settle based on fundamentals of usability and economics (for instance, why would a user want to pay more to clumsily touch the screen of a desktop PC when it's cheaper, more accurate, and less strain on the shoulders to rest your arms on the table and move a mouse?)

I wouldn't be surprised if newer versions of Windows re-implement the start button and allow the user to choose between PC mode and tablet mode. Some features of Metro such as the pretty fonts and colors may stick around but the changes in user interface philosophy will likely be abandoned.

RE: Metro has failed on all fronts.
By MadMan007 on 3/15/13, Rating: -1
RE: Metro has failed on all fronts.
By 91TTZ on 3/15/2013 1:25:29 PM , Rating: 1
Start Menu? Not happening, people need to get over it. The Start Screen is superior to the Start Menu.

It's funny seeing posts by Microsoft and those who defend Microsoft's actions. They have a weird combination of being clueless and being in denial. It's almost as if they can sort of see the reason that people don't want their new products, but they can't accept it and deny it's happening.

Look- Windows 8, Windows Phone, and Surface are FAILURES. People do not want them. People saw what Windows 7 was about and people wanted it. People see what Windows 8 is about and DO NOT want it.

You can lie to yourself all day long but that's not going to help Microsoft's bottom line. The sooner you and Microsoft learn to accept reality the sooner you'll see the reason for the failure.

Hint for the clueless- It's your job to give customers what they want. It's not your job to tell customers what they should be wanting. You can advertize to try to generate demand, but if customers see your ads and your products and reject them then you're doing something wrong.

Hmm, yeah, they should have included something like a DESKTOP live tile on the Start Screen...oh wait, they did.

Customers see your desktop live tile and soundly reject it. They want a desktop-oriented operating system, not a mobile-oriented operating system with a vestigial desktop.

RE: Metro has failed on all fronts.
By datdamonfoo on 3/15/2013 5:36:40 PM , Rating: 2
How is the desktop vestigial? What can't you do on the Windows 8 desktop that you can on Windows 7?

RE: Metro has failed on all fronts.
By 91TTZ on 3/15/2013 6:14:27 PM , Rating: 1
Since Windows 8 is based on Vista/Windows 7 code you're going to have the desktop there, but it's been de-emphasized in Windows 8. Also, other ways of doing things have been changed to more difficult ways. There's just no reason for it.

RE: Metro has failed on all fronts.
By Digimonkey on 3/15/2013 10:51:57 PM , Rating: 2
Nothing has been changed to be more difficult, people like to say this but can never back up these claims. Then when they try they give it away that they really haven't worked with Windows 8 much or at all.

I do believe the App portion of windows 8 is complete trash, but I like the new start screen.

RE: Metro has failed on all fronts.
By FlyTexas on 3/18/2013 2:35:55 AM , Rating: 2
I have been running Windows 8 on two different computers since launch.

Sorry, it sucks, it really does. We have 11 computers running in the office and put Windows 8 on two of them to try it out and get to know it.

It simply is not an improvement over Windows 7. In fact, those 2 computers spend all their time in "desktop" mode and it is just annoying when anything draws Metro back in.

Using applications pinned to the taskbar, we avoid Metro whenever possible.

About 2 weeks ago we wiped 1 of the 2 Windows 8 machines and put Windows 7 back on it, it just pissed everyone off too much.

The biggest issue? Windows 8 brings nothing to the table. It doesn't solve any problems, it doesn't help get work done faster. It is completely pointless on a desktop, we have yet to find a single reason to upgrade any desktop computer from Windows 7 to Windows 8.

By Digimonkey on 3/18/2013 10:10:40 AM , Rating: 2
Yes, using metro apps suck, I don't recommend using them unless you have a tablet. I spend all of my time in the desktop too unless I need to launch something or do a search then I use the new UI screen, it's a much improved start menu.

As far as not bringing anything else to the table well...I guess nothing critical, but Windows 8 offers improvements in many areas. The new Windows Explorer alone is something I wouldn't want to give up, along with a better and more complete task manager, not to forget the better performance in general over Windows 7. Also for power users everything is quicker to get to (less clicks away).

That said I wouldn't suggest paying full price for Windows 8 if you already have 7. It was worth the $40 upgrade price I payed though and when getting a new computer there is no reason to shy away from Windows 8 like there was with Windows Vista.

By Griffinhart on 3/15/2013 1:38:13 PM , Rating: 2
Exactly how is the Start Screen superior to the Start Menu?

By Reclaimer77 on 3/15/2013 5:41:58 PM , Rating: 3
Start Menu? Not happening, people need to get over it. The Start Screen is superior to the Start Menu.

Right which is why the highest downloaded thing on the planet for Windows 8 are mods that bring it back...

People, and oddly a lot of the most vocal claim to be tech savvy, just can't adapt their decades-old way of doing things even when the new way is more efficient.

Couldn't be more wrong.

This is a pretty "tech savy" group which specializes in things like this. Usability and accessibility in software/hardware. For example Amazon came to them when they wanted to identify and correct the problems in the first Kindle Fire going forward with the HD.

They give Windows 8 a very low score. It is NOT more efficient or user friendly for the desktop PC.

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