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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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What a surprise! (NOT!)
By jnemesh on 3/15/2013 3:06:52 PM , Rating: 2
Gee, who would have thought that you get miserable sales when you stop listening to what your customers want and try to push a crappy OS on a substandard piece of hardware (both RT and "Pro" models...don't argue on this, call me back when the damn battery can last a full work day!)

"It's not Metro" is a total failure in the eyes of most consumers. The lack of a "Start" button is a failure. The closed ecosystem is a failure. The battery life is a failure. The list goes on and on people.

What IS surprising is that Microsoft insists on continuing to push these products instead of responding to the problems that people are telling them! If they LISTENED to the customer, they would ditch the "Metro" interface and give the customers what they want...a FAMILIAR UI that does what they expect it to do, with menus that are placed where they are used to them. No hidden "charms", no full screen "Metro" apps (it's WINDOWS, remember? How the hell are you going to sell a program called WINDOWS that doesnt allow programs to RUN IN A WINDOW??!???!)

It doesn't matter WHY people don't like it...there is no "why", there is only nerd rage!

RE: What a surprise! (NOT!)
By datdamonfoo on 3/15/2013 5:38:00 PM , Rating: 2
Surface RT has the same battery life as the iPad. And Windows 8 is not a closed ecosystem.
I think this has more to do with people not having used the product and listening to the fools who happen to be the most vocal.

RE: What a surprise! (NOT!)
By 91TTZ on 3/15/2013 6:26:06 PM , Rating: 2
People have used the product and made the educated decision not to buy it. People try things out for themselves and make their own decisions. Most people simply don't like Metro. They don't want Microsoft phones, they don't want Microsoft Tablets, and they don't want Windows 8.

RE: What a surprise! (NOT!)
By FlyTexas on 3/18/2013 2:32:42 AM , Rating: 2
Yes, Surface RT (we own one) does last all day on battery, but there just isn't enough to do with it on battery.

The keyboard and Office is why we purchased it, but truthfully we find that most of the time we're using it, it is on a desk plugged in, making the battery issue moot.

We also own an iPad, that gets used everywhere else. Surface is not as easy to use as the iPad, the iPad got the size right at 4:3 rather than the 16:9 of Surface.

“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads

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