Surface 2: SOLD OUT!

In the USA most outlets that sell the new Surface 2 tablets (including the Surface 2 Pro) are out of stock. That includes Best Buy, Walmart Amazon and Microsoft themselves. See the full story at Mashable.

So the big question is, how many did Microsoft manufacture? Everyone knows that they severely over-estimated demand when the first generation tablets were released, so this time did they under-estimate? Is the Surface 2 now actually a hit product, despite the predictions of most experts?

Personally I would have expected the Pro to be a strong seller, but the basic model to still be a flop, given that other brands have full Windows 8 tablets for a similar price.

 

Microsoft: $900 Million Surface Loss Reported

In Microsoft’s fourth quarter reporting you can see a massive write-down of $900M for unsold Surface RT tablets. No further breakdown is provided, however Peter Bright at Ars Techinca has done the maths:

But that Surface adjustment is huge. The company said that it’s for Surface RT and related parts and accessories. We don’t know the exact breakdown of the $900 million figure. Worst case, it implies that the company has six million Surface RTs ($900 million divided by $150 price cut per unit) sitting unsold. The true number may be a little lower, due to some of the hit coming from parts and accessories. But Microsoft is still sitting on several million—perhaps as many as five—Surface RTs.

That Microsoft could underestimate initial demand is extraordinary. If you build too few, you can always make more later. If you build too many, then embarrassing price-cuts occur, and then they will either give them away or dump them.

If I were in charge, I would sell them to a government somewhere (Australia?) at $100 each – for schoolkids to use. But 5 million is lot of product to shift, even at bargain prices.

Schools Gets Surface RT For $200

Not long ago Microsoft gave away 10,000 tablets at a Texas conference. While it may have got the product some publicity, most comments were of the “they made too many” variety. It is certainly looking like there is a lot of surplus inventory and Microsoft needs to get rid of it before releasing Surface 2.

Now, according to a blog post by Ryan Lowermilk (which has since disappeared, but that doesn’t mean it wasn’t true), Microsoft will soon be selling 32GB Surface RT tablets to schools and higher education institutions for the very price of $200 – less than half price.

 

Microsoft #5 Tablet Manufacturer

When you compare Microsoft with those ranked at #3 and #4 it isn’t doing so bad – you just need to ignore Apple and Samsung. It isn’t doing bad if you consider the Surface Pro is now starting to take off in the corporate world.

Last quarter tablet sales figures:

Microsoft 900K
Amazon 1.8M
Asus / Google 2.7M
Samsung 8.8M
Apple 19.5M

Surface Fire Sale Has Commenced

According to InfoWorld, price are dropping on Surface RT tablets, as we get closer to the launch of Surface 2. In most countries you can get a free type cover – worth $100+.

Staples were selling some of the tablets for $399 (instead of $499( but it seems like they jumped the gun with the price drop.

And Microsoft themselves were offloading the product for just $100 at the TechEd conference. So now the choice is clear. Do you want the current model now, or the new model in a month or two that runs twice as fast. Remember, it is a PC, and speed is important!

Asus PadFone 2 more popular than Surface RT?

It’s a mighty telling question, because while most people probably saw Microsoft TV ads when the Surface was first launched (highlighting the noise made when connecting the keyboard) – few people would have heard of the Asus product.

Asus has shipped nearly a million of its PadFone 2 hybrid smartphone tablets since the product launched three months ago, according to Taiwanese supply chain sources.

 

The sales figures, published by DigiTimes, suggest Asus’ PadFone 2 could have outsold Microsoft’s Windows RT-based consumer Surface tablets.

 

SmartCompany recently reported one leading analyst predicting Microsoft has sold around a million of its consumer-targeted Surface RT tablets during the quarter, with IDC tipping sales as low as 900,000.

 

Source: Smart Company

Granted, you can’t really compare true sales figures with those guessed by analysts, but were it to be true, it is meaningful.

The products are reasonably comparable, given they consist of multiple parts and are both planning to be game-changers rather than incremental upgrades of existing competing products. Both are quite expensive. And both would probably be a hit if they were Apple-branded!