Posted by: Onuora Amobi
Microsoft, Microsoft Surface
When it comes to Windows RT and Windows 8, the flagship product is clearly the Surface RT and PRO. While we haven’t had an opportunity to see how well the Pro model fares on the market, the Surface RT has been out for a while now.
So how are things actually going for Microsoft’s Surface RT? Honestly, that’s no easy question to answer. Microsoft has been pretty careful not to talk about exact numbers. Is that because the Surface RT has been a failure? Not necessarily.
The truth is that retail distribution for the Surface RT was VERY small during the Holiday 2012 season. That means the numbers sold aren’t that high. Releasing these numbers would get doomsayers out on the net talking about how the Surface RT isn’t doing well, while ignoring some of the realities of the limited sale of the device.
Luckily, we can fill in some blanks thanks to analyst estimates. Two of the more trustworthy sources out there are arguably IDC and IHS iSuppli. The folks at IHS iSuppli put Surface RT sales out at around 680,000 to 750,000 units. As for IDC, they estimated that around 900,000 Surfaces were SHIPPED during the 4th quarter– that doesn’t mean all of these were sold though. The true number, only Microsoft knows for sure.
Still, lets take the IDC number and look at things a little deeper here. At 900,000 Surfaces, that seems pretty meager when you look at the top 5 manufacturers out there, with Asus even shipping 3.1 million units.
Did the Surface Really Sell that Poorly, Considering Retail Presence?
IDC points something out though. Except for at the very end of the quarter (10 days total), the Surface RT was sold exclusively online or through 66 retail shops in just the United States and Canada. Meanwhile, Apple had 390 shops, 150 outside of the United States.
So putting that into perspective, it is possible that about 14,680 iPads were sold per Apple Store, and assuming around 600,000 Surfaces were actually sold– that’s about 9,090 Surfaces per Microsoft shop Looking at it that way, the Surface did pretty well in stores. Even so, that’s not factoring that the Surface RT was only sold for around two-thirds of the quarter.
Adjusting for these days they weren’t on market, Surface sell-through at stores might have actually be a little higher at a per-store basis.
So what does that mean exactly?
A few things. Microsoft managed good advertising and hyped up in store sells early on, but a key component to their “low sales” for the Surface RT was a limited marketing presence. Is that all though? Honestly, probably not.
Microsoft got a lot right with the Surface RT. It is a solid product and an attractive one to boot. If it would have launched in 2010 or even 2011? It would probably have sold like hotcakes. Unfortunately, late-2012 and into 2013 has seen a pretty big shift. People don’t want to pay the “Apple Tax” for tablets anymore. There is significant growth in lower cost and smaller-sized tablets. Even Apple recognized this and created the iPad Mini.
The Surface RT and Surface PRO are a solid start, but Microsoft and its hardware partners are missing out a huge opportunity in lower-priced, smaller tablets. Had a Surface RT 7-inch model been launched instead of the larger Surface RT, proving it was under $300 or so– it likely would have been a hit.
So what’s the take away here? A few things. First, Microsoft’s Surface RT is NOT a failure. It has suffered some from limited retail and a rise in 7-inch demand over big-screen, but the future is still potentially bright for the tablet if Microsoft can find a way to bring down the price and better advertise Windows RT.
The second takeway is that Microsoft and its partners need to get involved in the 7-inch market now more than ever. They were late to the modern tablet game, they can’t afford to wait to join the smaller tablet market.
Ultimately, low numbers with the Surface RT prove little about Windows 8, Windows RT or the Surface product line. It was a humble beginning. Now it’s up to Microsoft to take the ball and run with it. Are they guaranteed success with the Surface going forward? Of course not, the bigger point is that it is just way too early to call the Surface or Windows 8/RT out as successes or failures. We will certainly know more as the year progresses.
What do you think of Microsoft’s limited sales success with the Surface RT? What could they do differently?