Is Surface already flatlining?
December 11, 2012
Microsoft pinned a lot of hope on Surface. The company fell way behind in mobile, and it hoped its own tablet would spark a monumental comeback. If web usage stats are any indication, though, the tablet's start can be best described as insignificant.
Analytics firm Chitika looked at tens of millions of (North American) tablet ad impressions from November 12-18. The Windows RT Surface barely registered, making up 0.13% of tablet web traffic. That means that out of every 10,000 tablet ad impressions, an average of 13 came from Surface.
It's still a new product, but this is hardly the start Microsoft wanted. It spent months hyping the tablet, marketing it as a new productivity-focused device. Steve Ballmer and company held two Surface keynotes, and spent millions in advertising. What happened?
Pricing didn't help. Surface starts at US$500, the same as the iPad. If you want its keyboard – Surface's killer feature – add at least another $100. It's understandable that Redmond sees its tablet as an iPad peer, but customers have balked at buying non-iPad tablets in that price range. It's as if Microsoft didn't notice the Xooms, Playbooks, and Galaxy Tabs that had already failed with that strategy.
Its retail strategy bombed too. Microsoft sold the tablet exclusively through its retail stores (physical and online). How did that work out? So well that Microsoft just announced that it will soon begin selling Surface at additional retailers.
There's also the tablet itself. Its operating system is complicated, split into two desktop environments. It has a sparse app library. The device's display, battery life, and cameras are inferior to the iPad's. A kickstand and a keyboard clicking sound aren't going to make up for that.
Chitikia's statistics are bad for Microsoft, but they aren't much better for Google. The Nexus 7 and 10 combined for over seven times the web traffic of Surface. That sounds good at first, but it still only makes up about 1% of tablet web traffic.
The iPad continues to dominate, with 88% of all tablet web traffic. Yet the iPad's global market share reportedly dropped to between 50-56% in Q3. There are two possible explanations for this discrepancy: a) rival tablets are more popular outside of North America, or b) after taking them home, customers use iPads much more than they use other tablets.
Trouble in Redmond?
Either way, the tablet market is still a steep hill for iPad rivals to climb. Microsoft was reaching for the sky with Surface, but the first battle has been a failure. Now Redmond is left to play the long game, and hope its Windows 8 Pro Surface (due in January) will fare better. Judging by its $900 starting price, its odds aren't looking much better.
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