Analyst: Holiday Sales Of Microsoft Surface Have Been Modest To Date

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Analyst William Power from R.W. Baird have told that Microsoft‘s Surface sales was not encouraging from retail chains like BestBuy, Staples, etc,. According to the sales reps, the sales volumes have been modest to date.

Microsoft’s Surface, which Best Buy just recently started carrying, was not recommended to us by reps without us asking about it specifically. When asked about sales to date, reps noted that the device was new and indicated that early demand has been modest relative to the iPad and Kindle Fire. We would also note that the device was in stock at every store we contacted […] We contacted Staples stores in an effort to further gauge Microsoft Surface sales, though our impression from speaking with reps was tablets are not a major seller at Staples. Tellingly, Staples doesn’t currently carry the iPad. When pressed for details, Staples reps indicated that Surface volumes have been modest to date. Most reps told us that the primary appeal to Surface buyers is the ability to run Microsoft Office. Consistent with our Best Buy checks, the Surface was also in stock at all Staples stores we contacted. Outside of the Surface, the Google Nexus 10 was cited as another strong tablet option.

Is it too early to compare the sales of Microsoft Surface to Apple iPad? I think so.

Source: Barrons



About Author

Pradeep, a Computer Science & Engineering graduate.

  • SategB

    Sadly about the only difference between MS success with the Surface and what they had with the Zune is that at least no fat guy has run out and got a tattoo of the logo on his body.

    • http://www.twitter.com/wixostrix WixosTrix

      That we know of.

  • arend

    the difference with zune was that the zune line up had exclusive software while the success of the surface software(windows 8 rt/metro) does not depend on the actual surface sales but rather on the whole of windows 8 sales for support.

  • http://twitter.com/surilamin surilamin

    With all the horror stories I’ve read about people’s retail experiences in buying the Surface, I’m not surprised.

  • http://twitter.com/efjay01 Ef Jay

    They are still failing to give a compelling reason why the average consumer should buy one. Stands in stark contrast to the Lumia 920 which seems to have created some demand due to its unique hardware and software features. Not seeing the same push for the Surface or even Windows 8 for that matter. The Surface may technically be better but without telling anyone why will people buy it?

    • AviD

      One killer feature: Multiple users. In my family surface all the kids and grownups have their own account so that they we can all share it without using a single profile (like iPad) I cant tell you how many times my son would not let other people touch his iPad because he didn’t want them to mess up his progress in the newest game he bought.
      The surface may have its wrinkle like any v1 product has but at the end of the day its a kick ass table with clear advantages in hardware as well as software.
      I am sure the apps will follow.

  • grs_dev

    Based on my own personal experience, I have witnessed Google Chrome gurus inside Best Buy giving potential buyers advice on which PC to buy. The customers typically were hovering in the Windows section looking at a typical HP or Dell laptop unknowingly getting advice from someone who’s trying to steer them towards a Chromebook.
    There was 0 Microsoft representation.

    • Joe_HTH

      Anyone who would steer consumers to a Chromebook over a Windows PC is an idiot. Then again, any consumer who would get suckered into such a piece of shit as Chromebook, deserves whatever they get.

      • chromebooks_have_their_uses

        I wish my mother in law would buy chromebook. Figuring out which crapware she’s installed/reinstalling windows7 every few months is painful.

        • NGM123

          chromebooks have their uses…agreed, one very good use being a very effective door stop.

      • grs_dev

        I think you’re missing the point. Microsoft is not matching the in store, in market, in isle efforts of its competitors. Whether they’re counting on Dell and HP to do it or not is something we’ll never here on this blog know for sure, but the bottom line is that someone needs to be playing defense and protect the channels and right now, no one is.

  • iamthebaseman

    well, selling the Surface with an 8 hour battery life and no Outlook is going to be about as successful as selling the Surface with a 4 hour battery life and Outlook. These are not compromises we should be asked to make. I am a Surface owner, looking forward to software 2.0. The Hardware experience is pretty awesome.

  • NegLewis

    This is a MS OS – Windows and the Hardware is quite good.
    I believe this has a lot of potential and MS sells it quite ok.
    BUT!
    Why this is not a killer Product?
    MS has make a name from Windows by supporting lots of versions of .com, .exe, .bat, .inf, drivers, , …
    What is the “exe” of the RT or WP?
    THIS is the main problem of Windows RT and WP.

    If RT == WP ” then there must be a common .exe” file format. RT Tablets MUST support WP Apps.

  • koenshaku

    If it were $500 with the type cover I would buy one. I will likely buy the surface pro though.

  • http://www.facebook.com/alexander.nevrmind.7 Alexander Nevrmind

    Its all about Marketing, Pricing and booting Steve Ballmer. He is a horrible CEO that has wrecked MS since he took over.

  • SteveA

    Surface is too expensive compared to ipad! why would anyone who is not a MS fan boy get a surface when they get can get ipad with same price and over 700K apps? As Usual MS over valued the Office brand. If Surface was 300-350 with cover it would have done much better.

    • PoohGQ

      I really don’t understand why so many of you are hang-on to this 700k app thing! All these apps are merely website packaged in an app. Yes, I agree a lot of people are also listening to [pretentious] journalists who, also ignorant of the actual need for all these apps, are advocating the lack of apps on the Surface/Windows RT as a negative. Honestly, I have all the apps I need to get my job done (Office2013 being sole reason to have the Surface], including games and Xbox Live games. At the rate at which new apps are being added to the Windows Store, this will not even be an issue in 6 – 8 months, unless MS pulls the plug on Windows RT.
      MS doesn’t have to undercut the value of the Surface [just yet] to make money by selling lots of them. The market spend seems to be working quite well as most people I’ve met are aware of the Surface brand so far, including my friend’s sons who get excited every time they see one being used on the subway.

      • Bugbog

        I whole-heartedly agree! Despite the hurt to my pocket, I like the tack that Microsoft is taking with delivering a Premium, Added-Value product to market.

        They should stick to their cost current path, and not deviate simply for short term sales ratings, as all the negative-nannies keep suggesting. The computing masses need to start associating Windows 8 with value hardware, and not as a cheap throw away product (like Android tablets are becoming!)

        The Surface is here to stay as a Premium, if lesser sold, device.

        Get used to it!

    • oldjovian

      Steve, how many apps do you have on your iPad?

      • VHMP01

        And more importantly, how much more have he spent in those apps?

      • VHMP01

        And more importantly, how much more have he spent in those apps?

    • JulianC

      Ipad is too expensive compared to Surface! Why would anyone with a logical mind who isn’t brainwashed by biased media get an Ipad when thy can get a Surface with usb support, xblive games, awesome multitasking, expandable memory, full Microsoft offce, and cover that doubles as a keyboard? An IPad is just something you fork out a few hundred bucks to play games with. Sure an IPad has ‘pages’ and ‘numbers’, but that’s nowhere near office. As usual fanboys being blind sheeps.

      • Jonathan

        Oops, and you forgot to mention that if they bought Surface they’d also get … keypads that come apart at the seams, sluggish performance, a TrueHype display, substandard resolution cameras, a super-efficient OS that only takes up half the capacity, and the revolutionary new AWD and AAI (Automatic Wireless Dropout and Automatic Audio Instability) features.

        But how’d you expect these illogical, blind sheep Apple fanboys to recognise a good thing when they see one?

        • JulianC

          Heh, yeah, 1st gen Ipad was flawless. All I see you talk about is faulty products which are the very minority. My surface had none of those problems. So your logic is spending a few hundred dollars for a toy is more reasonable than something thats actually useful. Blind sheep.

    • mrdeezus

      You are an apple fanboi. Does the iPad have hdmi, flash or usb? I dint think so. What about micro sd? All you have is 700k apps and please show me someone who has all of them installed. Oh and office too. Actually the ipad is overpriced.

      • Jonathan

        Yuh, no HDMI, flash or USB and so overpriced they only sell about 15-20 million units a quarter. Reality sucks, doesn’t it?

        • Raygun

          Its amazing what a company can accomplish when they appeal to the emotions of ignorant people because…well there are a lot of ignorant people on this planet.

    • blackanbald

      Please show me where the iPads have 700,000+ apps?

  • Steve Leighton

    I write this as a satisfied and enthusiastic Surface owner (have even been an evangelist on occasion): Surface marketing effectiveness is simply abysmal. Despite the brilliant and innovative design, the solid build and attention to detail, the effective and quite extensive feature set, and overall value, the tablet and PC-buying public has no idea what it is or where to get one. I love the ads — they are well-done, entertaining, and catchy. But apparently ineffective. On occasions when I use my Surface in public, those who notice and ask typically have the following question: “what is that?” Despite the unique kickstand and touchpad. Despite the obvious fact that I am using Windows 8 or a 2013 version Word or Excel or Powerpoint or OneNote while I am listening to music. The exception happened today — another Surface user gave me a thumbs up. Viral marketing and word-of-mouth in the coffee house is a long and winding road when you are not alone in the market. Some here have used Zune as an analogy. I have a scarier one: the Apple Newton. It had all the same promise. By version 3 it kicked serious butt. Jobs returned to Apple and killed it dead because, frankly, it was a cult film. It never overcame the original image of a device ahead of its time that couldn’t recognize handwriting despite the stylus — something that could not have been further from the truth in version 3. I spent almost $2,500 on Newtons and probably well over $3k all in including accessories and apps (yeah, they existed back then — late 90’s). If Jobs hadn’t killed it, Palm had pretty much taken over the PDA space anyway. Everyone knew what a Palm Pilot was. They’d see a Newton and ask if it was a new Palm Pilot.
    My experiences at Staples and Best Buy this holiday season don’t make me feel any better that we’ll ever see a Surface V3. At Staples, the sales staff had no idea what a Surface was. Seriously, no idea. The small aisle-cap display was shoddily assembled, crooked in fact, and gave the overall appearance that the thing sitting on it was shoddy, too. At Best Buy, they knew what it was — kinda sorta. It was sitting there, next to last in a row with the other tablets, a bunch of different Androids, the Surface, and an iPad 2 at the end. But, the iPad also had its own nicely done aisle-cap display. Near the other Apple products neatly arranged on a clean table. The Surface I saw was sitting in some application that needed internet access (most do, right), but there was no active internet connection. So it did nothing. I took pity and connected it, started up explorer with a split-screen camera/front-facing/on video — so something was at least happening when you walked by. That probably lasted 5 minutes. The touch covers and accessories were in another isle, right next to the iPad covers. Not near the Surface itself. If Microsoft has to rely on its customers taking pity on its marketing, there is a problem. I won’t take the time again.
    It may be a good sign for Microsoft that the Windows 8 touch-screen laptops and all-in-ones looked to be walking out the door at a good clip. Customers seemed to be having no problems figuring them out. Maybe the Windows 8 commercials are helping. The other PC manufacturers seemed to have taken care with the limited space they had to differentiate their products, setting things up to highlight unique characteristics.
    And the nice-looking Apple table was nearly deserted, the few who walked kept trying to get the screens to respond to touch and seemed to think the screens must be frozen. But, if someone really wanted to drop $1,500 – $2,500 on a laptop or all-in-one, they probably were shopping at the Apple Store. The nearest Microsoft store to me (decent sized city with at least three sizable mall-based Apple stores) is a holiday “store” which is really just an aisle kiosk that looks like one of those places where you can buy fancy phone covers.
    If there is any silver lining here, I guess it would be that there will be a fire sale and I will pick up a couple of spares. Shame, too. I had been thinking I’d just hold onto the Surface RT, then resell it when the Pro arrived and trade up. Now I find that the RT does nearly everything I need it to do since I can remote into my Intel-based PC when I need something more, so I need the Pro less and the RT will be worth less anyway. It will be a real shame if Microsoft can’t turn this around.

    • Bugbog

      Based on all the observational reports that I keep reading, I can only presume that the staff employed at places like Best Buy and Staple are some kind of ‘living dead’ zombies! Shuffling along the store aisles, only able to repeat tasks absorbed before they became brain dead!

      I seriously don’t know what sort of people they have. My own [actual] observations from when the Surface was released gives me the impression that these people are morons!

      Literally a week after Windows 8 was released I’d obtained my Surface. I had an engineer over for some work, and after seeing it he asked if that was the new tablet, to which I surprisingly answered yes. Same thing with my 11 year old niece “oh, that’s that new clicky tablet!” I was showing my sister the Lenka ‘everything at once’ unofficial video and was surprised to hear her singing along, I asked her where she’d heard the song, to which she responded that she couldn’t watch TV for 5mins before the song was played as part of the Windows 8 advert!

      What I’m basically getting at is, with all the advertising going on, how is it that these store staff (leaving aside the fact that it is actually their JOB to know such things) are able to display such Astounding ignorance?!

      • NGM123

        It’s simple.You pay peanuts, you get monkeys working for you.
        It’s just a result of shops hiring shelf stackers because salespeople are more expensive. What your after is passion, and passion costs money.
        It’s just a natural step in the evolution of dumbing down our economies and our nations in the process.

        • Bugbog

          I well understand the ‘WYPIWYG’ ratio, but these bozo’s are on a different level altogether! Even Monkeys would be aware of what the Surface was, if they happened to live in cities!

    • mrdeezus

      This my friend is the problem. When will MS learn that specs is only part of the solution you have to show people in commercials why they need your product, not kids doing breakdances and clicking kickstands. I’m a very satisfied surface owner.

  • donzebe

    Personally I check into 3 bestbuy stores in my area on several occasions was lying face down on the cover. Each time I walk into a store I will have to look for the surface, poor surface was usually lying face down into the cover and I will take the time to get it back into place and turn it on. one will hover around for a very long time before any rep will approach. My take is, the way the surface is displace in the stores I visited is not captivating at all, it will not attract a customer at all. Displaying 3 all black products in a roll makes the surface not to stand out. Microsoft could have use the blue/cyan or red cover as a displace unit so that the surface will stand out and even be attractive to passerby. The surface and other windows tablets are poorly displace in stores. Microsoft could have gotten a stand for surface alone, just like what Apple, amazone kindle and Samsung galaxy has done. If Microsoft want to display all windows tablet in the same area they should do it with some style.

  • Ocelotty1

    I have a simple rule that I try (not always successfully) to follow – Lot 1 will be inevitably be crap; wait for the 2nd or preferably the 3rd iteration before jumping in to a new product range. Even though I really, really want the Surface Pro I have grave reservations regarding its battery life and capabilities. The wait is killing me but I want to see a few reviews first.

    • Steve Leighton

      If you are waiting for 3rd iteration, you may be waiting a very long time. Despite what SHOULD be a runaway success, current inventory will take a long time to churn through. Unless someone else with an RT tablet makes it a success, unlikely Microsoft will invest any more in Surface RT. Surface Pro should have a willing buying public, but if the marketing is no better than for Surface RT, it may not be a high-volume seller, either. As for waiting for reviews, how will you sort through all the sour grapes crap and inconsistencies? Look at how many reviews of the Surface RT are just lifted and repeated without any change, to the point where it is clear many of the reviewers have never used one, let alone seen anything more than a picture. I have given up trying to clarify the misstatements and bogus statements of “fact”. If Microsoft is not going to do anything to combat that stuff (other than playing the same dirty game trying to go after Android with made-up crap), why should it deserve a loyal fan base? The combination of Windows 8, Windows RT, Surface, Office 2013 or 365, Skydrive, Xbox Music and Video, Smartglass, Windows Phone 8, etc. should have created an opportunity for a Microsoft renaissance: a real answer to Apple’s consumer play, RIM’s epic fail, and Google’s lack of focus. It is hard to watch it all floundering, because while the vision may be clear to us watchers, it apparently is not being transferred to a broader audience. The arm-chair quarterbacks, back-seat drivers, and legions of fanboi’s recruited by Apple and Google are having a field day — and at this point, I have to say, if Microsoft is going to roll over for it like this, then they have it coming.

  • oldjovian

    Microsoft is failing to educate the public about the advantages of Windows 8 and Windows 8 devices. There overall concept is very appealing, but people don’t get it yet . . .

    Excited to setup the new Surface RT that Santa brought me . . .

  • http://www.facebook.com/iain.simpson.127 Iain Simpson

    I was in a best buy in Canada watching a couple looking at the surface for the office integration only to be steered away to an android tablet cause the salesman said that had a better office and opened most office documents. Sales people are the biggest reason if the surface isn’t selling because of the bias towards a certain device.

    • SocalBrian

      I don’t doubt what you saw but I do doubt that this is the problem – up until very recently all sales were through Microsoft’s tightly controlled outlets with no competition and friendly sales people – and even then it struggled.

  • http://www.facebook.com/people/Gavin-Tom/100001144097567 Gavin Tom

    Man, this product should almost sell itself it is so amazing. Another stumble on Microsoft at marketing. sigh.

  • NGM123

    Maybe their will be a realistic price adjustment, good product just to damn expensive.

  • NGM123

    Maybe there will be a realistic price adjustment, good product just to damn expensive.

  • http://twitter.com/counterblow the person

    Well yeah, if you compile your analysis based on interactions with BB d-bag sales associates then yes you will conclude sales have been modest.

  • PoohGQ

    Here’s an interesting articles on Microsoft and sells of Surface: http://bit.ly/V7XxzE

  • Jonathan

    Anyone who blames retail stores for weak sales just doesn’t understand simple business economics. Every store has a finite amount of cash to buy inventory with so they’ll stock up on stuff that sells fast and make the most money they can. Why should they take a financial hit just to boost Microsoft’s numbers?

    If a product is good, people will drool over it, the retailers will push it, and the stuff will fly off the shelves, making them lots of profit. In spite of all the hype and excuses you read in places like this however, the overwhelming majority of consumers see the Surface as just another train wreck in Microsoft’s long line of “MeToo” products.

    But why the preoccupation with where you think the retailers are failing in the first place? Ballmer himself said that response to the Surface has been (quote) “fantastic” and I’m sure he wouldn’t lie … would he?