Expectations can be a killer. Just ask Microsoft, as the software
giant and nascent hardware maker struggles to gain some market share in the highly lucrative but somewhat rigid tablet market. Devices powered by Microsoft's Windows 8 and Windows RT, launched in October, are having a tough time gaining traction against market-leader Apple's iPad devices, which created the market in 2010, and Samsung's wide range of something-for-everybody tablets and "phablets."
Now comes a report that the Surface, the first Windows device made by Microsoft (which usually licenses its operating system to other manufacturers) hasn't met hoped-for goals. A report by Bloomberg said the Redmond, Wash.,-based tech giant has sold 1.1 million Surface devices powered by Windows RT, while the pricier Surface Pro, powered by Window 8, sold about 400,000.
The report cited three unnamed sources familiar with the matter and noted that at least one analyst had projected 2 million Surfaces sold by the end of last year. Three million devices were ordered by Microsoft.
Building a Market
Both the Intel Core i5-powered Pro and the Nvidia Tegra 3-packing Surface RT come with an optional keyboard, unlike Apple and Samsung devices, and have garnered mostly positive reviews. As the name suggests, the Pro was seen booting up, surfing and launching apps faster than its sibling, and can run legacy Windows software. The Pro costs $899 for the 64-GB version and $999 for the 128-GB. The RT costs $499 for a 32-GB version, $599 for the 64-GB
Microsoft is counting on both models to build a market for Windows-based tablets, rather than iOS and Android, as PCs running the company's operating systems and application suites gradually head for extinction.
Research firm IDC this week forecast steady growth for Windows in the next four years, with a rise from 2.8 percent market share this year to 7.4 percent in 2017 for Windows 8, and 1.9 percent to 2.7 percent for Windows RT.
So, are the leaked numbers, if correct, good news or bad news? Both, said analyst Jeff Orr of ABI Research.
Hope Lies Ahead
"The timing of Windows RT and Windows 8 launches in October 2012 were simply the worst possible time of the year to introduce something new that audiences could not play with and touch before needing to commit to end-of-year 2012 (holiday) purchase," Orr told us. "It had zero impact on business purchases and slightly more than zero gains for the consumer market."
The analyst noted that using the Surface devices requires a "learning curve" for using its Live Tiles interface, regardless of their previous experience with earlier Windows systems.
"A certain amount of 'unlearning' must occur to get back to the same level of productivity and convenience users had with Windows 7 and earlier," Orr said.
ABI Reasearch predicts, however, that more businesses will start to look at Windows-based tablet solutions toward the middle of this year, with a "wave of adoption" occurring around the beginning of next year.
"While that sounds like a long time from now, it's fairly efficient from previous technology and PC evaluation cycles," Orr added.