Microsoft took its first step into the tablet industry this past year with its Surface for Windows RT, but the company may have a long way to go if it wants to rival Apple, Google and Samsung in that arena. The sales estimates for last quarter are in, and experts say that Microsoft may have only sold one million Surface tablets during the holiday season.
As a result, Microsoft’s fiscal second-quarter earnings could amount to less than initially expected due to low demand of the Surface tablet, Bloomberg reports. This number comes from UBS analyst Brent Thill, whose projections slightly exceed those of Detwiler Fenton’s from last year. The brokerage firm suggested that Microsoft would sell less than one million units in the last quarter of 2012, aiming at a 500,000-600,000 range. Detwiler Fenton referred to Microsoft’s strategy as “in disarray,” but did say that Surface sales could improve in the second half of 2013.
Thill attributes this estimate to a “gloomy sentiment” lingering after the holiday shopping season, as he cited in his research report on Monday. He also cut his earnings per share projection for the quarter to 78 cents, marking an 8 cent drop.
“Surface Pro is the more promising model,” Thill wrote, according to Bloomberg.
Microsoft is likely to launch its Surface Pro at the end of the month, but has yet to specify a launch date. Back in November the company confirmed that it will hit store shelves in January, but didn’t reveal when. Unlike the Surface for Windows RT, the Surface Pro will come equipped with Microsoft’s full Windows 8 operating system.
This means that it will have the ability to run both legacy and new Windows apps – a feature that the current Surface model doesn’t have. In addition, the Surface Pro comes with Intel’s i5 Ivy Bridge processor while the Surface for Windows RT runs on an ARM-based processor.
Although Surface for Windows RT sales may not be what Microsoft had expected, this could be attributes to its limited retail presence. For the majority of its shelf life the Surface was only available through Microsoft’s own stores, some of which were implemented only as temporary holiday locations. The company also sold its first self-branded tablet online before rolling it out to major retailers such as Staples and Best Buy at the end of 2012.
As a point of reference, Apple’s iPad was projected to reach sales of up to 14 million units in the fourth quarter of 2012.