Galaxy hits 100m, Surface only manages 1m
Analyst says Microsoft's Windows RT flagship only sold half the units predicted, while clouds gather over Apple too
Published: 15 January, 2013
Analysts are busily assessing the mobile device performance of the critical holiday quarter, and some key trends are already emerging, notably Samsung consolidating its lead and Microsoft struggling to get Surface established. But looking ahead, there are further nerves surrounding Apple, and a burst of hopefulness for RIM's BlackBerry 10 launch at the end of this month.
According to calculations from Brent Thill of UBS, Microsoft's Surface tablet - the showcase for its ARM-based Windows RT operating system and a bold move into the own-branded device business - sold only just one million units in the fourth quarter. This figure contrasts with Thill's previous forecast of two million tablets.
The analyst cited two factors in a client note this week - the inevitable comparison with the incumbent device in this category, the iPad; and over-narrow distribution channels, which limit the product's exposure. Other observers, however, place the blame firmly on the high price point, arguing that Microsoft has not made it sufficiently clear to customers how the premium over other tablets is justified.
Poor performance for the Surface, if it persists, will be a double-edged sword for Microsoft's OEM partners. Some, such as Acer, called on the firm not to venture into their market under its own name, and may be pleased if a potential new competitor fails. However, a flop for the highest profile Windows RT vehicle will cast doubt over the whole sector, at least in the short term, and may reduce the opportunities for other slate makers.
Samsung has already cancelled the US launch of its Windows RT tablet, the Ativ Tab, blaming the unclear positioning of RT - some of which must be laid at Microsoft's door. Mike Abary, an SVP at Samsung, said in an interview: "There wasn't really a very clear positioning of what Windows RT meant in the marketplace, what it stood for relative to Windows 8, that was being done in an effective manner to the consumer. When we added those two things up, the investments necessary to educate the consumer on the difference between RT and Windows 8, plus the modest feedback that we got regarding how successful could this be at retail from our retail partners, we decided maybe we ought to wait."
Meanwhile, Nokia is said to have held back on a Windows RT launch because of the potential conflicts of interest with Microsoft Surface, and because it wants clearer indications that RT devices will be a success, using the Surface as its benchmark.
Such decisions, if they spread across the ecosystem, could seriously depress the first wave of RT device launches - which will be good news only for Intel, and for Google, since it will push the focus of the ARM-based tablet sector firmly on Android. Thill has higher optimism for the Intel-based Surface Pro, which will debut later this month, because of its higher levels of performance and features, making it a real alternative to the iPad for the business user. He expects total Surface sales of 2.5m units for Microsoft's fiscal 2013, which ends in June, but a leap to 8m units in fiscal 2014.
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