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Is Surface already flatlining?

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December 11, 2012

Have Surface sales already flatlined? (partially sampled from Shutterstock)

Have Surface sales already flatlined? (partially sampled from Shutterstock)

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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?

Botched release

Microsoft went all in on Surface and Windows 8, but customers haven't

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.

iPad dominance

Despite slipping market share, usage statistics show the iPad still dominating (Dweider | ...

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.

Source: Chitika via AllThingsD

About the Author
Will Shanklin Will Shanklin is Gizmag's Mobile Tech Editor, and has been part of the team since 2012. Will has a Master's degree from U.C. Irvine and a Bachelor's from West Virginia University. He currently lives in New Mexico with his wife, Jessica.
  All articles by Will Shanklin
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34 Comments

It just seems like another me too product. Also, microsoft has gotten a reputation for buggy software. I have an iPhone, iPad, and a macbook pro. They all just work. I used to have PC's and had trouble with every one of them. Simply not stable.

Thomas Braum
11th December, 2012 @ 10:56 pm PST

Dear Microsoft and Mr. Ballmer.

In case you didn't know the economy is in bad shape, Let me tell you it is....people don't have the money and if they do they are not going to spend it on half baked products like this.

I'm looking to find enough money to buy food let alone some stupid thing like this.

S Michael
11th December, 2012 @ 11:07 pm PST

I would not buy a surface just yet. The price point is way too high. I can't believe MS priced this the same as the Ipad. They should have sold these at cost or slightly below just to get them out. Bill gates used to supply dos for nearly nothing back in the early days just to get it on as many boxes as possible. Next year I expect the price to drop on the surface in a drastic way. Wait a little longer and you may pick one up at basement bargain prices if MS decides to discontinue it as a failed attempt to enter the tablet market. IMO only Apple can charge a premium. For everyone else its about price driven commodities. MS needs to keep it at levels at or slightly higher then the Android products. I have a Galaxy tab 2 10.1 that is amazing for 280 dollars. IMO surface needed to be priced at no more then 350 dollars. And even at that price, I'd rather have ICS galaxy or galaxy note. Its beyond me why anyone bothers with IOS with no real program manager or way to add memory with no XVID AVI flash support. I predict windows phones and tablets will go nowhere. MS will continue to sell W7 to businesses and W8 will probably lose more customers to Apple. Just like Vista did. Don't know what W9 will bring but something tells me MS will listen to us instead of just feeding us what they think we want. Only Apple is somehow allowed to to that.

Trent Larson
11th December, 2012 @ 11:35 pm PST

judging sales by ad impressions? it may be valid, but questionable from where I sit. most of my gadget-freak friends use an Android tablet, even if they also own an iPad. never heard of Surface until now though.

John Comeau
12th December, 2012 @ 12:02 am PST

Is my maths wrong.

IPad = been out 5 years = 10's of millions sold

Surface = Out 1 month = how ever many sold

Comparing 5 years of iPad users to a month of a new products website usage no wonder the figure is so low.

Dylan Kemp
12th December, 2012 @ 12:44 am PST

They launched too expensive. They should've launched at a break even cost, and made a bit in the surface pro. At this point market share is more important than profit. didnt they learn that from the xbox? Also releasing the pro version later: honestly a monkey could plan better marketing strategy.

Gethin Coles
12th December, 2012 @ 12:46 am PST

Also bear in mind. The current Surface with RT. Everyone I have spoken to is waiting for the Windows 8 Pro version to come out before buying....

Tim Parnell
12th December, 2012 @ 01:31 am PST

I disagree, I have a Surface RT and love it. I never want to have to use a laptop again. It's a great balance between a consumer laptop and a tablet, without some of the limitations which other tablets have, The problem is that Microsoft have so far failed to get them sold via retail channels, it's a product people want to try before they buy. Everyone who's tried my Surface wants one. So far it's been bug free and is a great product.

JuMo
12th December, 2012 @ 04:37 am PST

Speaking for myself (and I could be in the minority here), I have no real interest in the RT. it competes head to head with Android and iOS (the latter I've spent a lot of money on buying apps), and introduces yet another OS to buy into. I'm waiting anxiously on the Surface Pro. It'll replace my laptop and, with my planned transition to Windows Phone 8(x?) next year, will do me nicely.

I fail to understand why MS built such a nicely engineered product only to hamstring it with distribution. Maybe they lack the ability to produce on a scale comparable to Apple products? I don't know, but it was (is) a seriously bad move. I don't think the price point is too high, but I also don't see the logic in delaying the Pro, as it's mere presence will make the RT seem like a "better deal" for many.

MS - get the Pro out ASAP, put it on as many shelves as possible so we can see it, and let us finally have a reason to buy in!!

Who's with me??

Vince Pack
12th December, 2012 @ 07:16 am PST

The major number 1 reason it is flatlining, is that it simply is bad. Tried it, and it is no more than Windows Mobile platform on a bigger screen. The surface design and desktop layout is one of the most annoying, the random-coloured squares do nothing except infuriate you. There is no order or sense to that desktop, and Windows 8 is joining the stupid club. Windows 8 however has a point, this one doesn't.

Samer Helmy
12th December, 2012 @ 07:39 am PST

I work for a company to that wanted to use the WInRT version on an ARM platform. Mainly because we have an application in .NET that could easily be translated over to the WinRT and the power usage on ARM tablets is much smaller then our client's laptops. Unfortunately to get an ARM platform that would work with WinRT requirements the hardware cost + OS cost was going to meet or exceed that cost of a traditional laptop that already runs our software.

We also tried both versions of WinRT with our web application that runs well on IE, Chrome, and FireFox. The thought was use PhoneGAP and package it up for RT. It failed spectacularly because some common features on all other modern browsers aren't supported yet. IMHO: Its just not business ready.

Ervin Kosch
12th December, 2012 @ 08:32 am PST

I am sure the surface works fine. Why wouldn't it? Apple has provided Microsoft with excellence to copy.

The wisdom of Steve Jobs regarding Microsoft is timeless: ". . .they just have no taste; and I don't mean that in a small way; I mean that in a big way."

Microsoft did not originate with a man who saw beauty in life and wanted to make the world a better, cooler, more beautiful place. It began with a rapacious business warrior named Bill Gates. Bill was a man devoid of warmth, compassion or humor, with ZERO sense of style, finesse, coolness. He lived to crush competitors, often making it difficult or impossible for them to even get their businesses going.

From the first time I heard of Microsoft, it was always accompanied by a threatening edict something like this: "They're the industry standard. If you don't learn their product, you won't be able to function in most workplaces."

In 20 years I never heard anyone say they chose Microsoft because the company produced things that got people happily excited.

Virtually everything that company has done to survive comes down to copying others, very much like a sociopath that has no true human feelings, so to get through the day they must always be responding to others, imitating them.

Hey Microsoft! Try to blow away Apple the way Apple blew away Palm.

bramachari
12th December, 2012 @ 09:11 am PST

I bought a new laptop running Windows 8, had it 2 days and returned it. It was a disaster for me. So why would I even consider a Surface running a system that almost drove me to drink? Had windows 8 been out for a year it might have made sense, but I have not found anyone who is recommending it so I think it hinders the sales of Surface.

Jschneir
12th December, 2012 @ 09:24 am PST

I have noticed that initiatives started under Steve Balmer after Bill Gates handed over the reins to him have not seen the level of success as when Bill Gates was running the show. Microsoft needs a new leader to get back to the level of success of years ago.

CarlMR
12th December, 2012 @ 09:48 am PST

@bramachari---I agree with you but you can't forget that Apple wouldn't be here today without the financial help it got from Microsoft in a deal made between the two companies. It gave Mr. Job a platform to streamline and boost the company into what it is today. I think the only way Microsoft could compete with Apple is if they had their own Steve Jobs. It doesn't look like that will ever happen. Apple makes nice stuff, I like the iPad but can't justify paying that much for something I wouldn't use to its full potential. Most people I know that have Apple laptops and iPads only use them for surfing the internet, Netflix, youtube, typing up a Word document and wannabee video and photo editing. What annoys me is that they think their Apple is the best and pass this hype on to other uneducated friends/co-workers and they buy into the hype when all of these tasks can be done with a system costing a quarter of the price. Apple computers are great for professional video, photo and music production but overpriced for general consumer needs. I just went off on a useless tangent, sorry. To summarize, Steve Jobs = brilliant, Microsoft = desperate and Consumers = un-informed.

MG48
12th December, 2012 @ 10:54 am PST

I have a surface and i love it. I also have an IPad 2 and I find they're very different devices.

A good analogy: The Surface is to the IPad what the Xbox is to the Wii.

The surface is a tremendous device for writing and multitasking. For apps its abysmal (so far), but this will change.

The interface is excellent and has caused me on numerous occasions to try the same gestures on my ipad before realising that it doesn't work.

I use the surface for: document writing/editing (two windows side by side, cutting and pasting, it's magical), skype (being able to see and talk to someone while you're browsing the web and to easily cut and paste links is brilliant), Skydrive (quite good) and netflix. I use my ipad for games.

The wii was a brilliant device but a bit of a novelty. Serious gamers got rather frustrated with it over time because it just doesn't measure up to the xbox or the PS3.

Similarly with the IPad, as an actual productivity device (document editing, taking it to meetings, etc) the surface wins hands down. The Ipad is great, perfect for games, makes many things easy. But it is best as a consumption device, plain and simple.

The surface however has not replaced my laptop. I'm a developer, I write code, I need a serious machine for that. But nothing beats taking my surface with me when I grab my lunch, pop it out and do some documentation editing while I munch away.

I think the surface and windows 8 may yet grow on people if they give it a chance and take the time to learn the interface (and they have multitouch, a traditional mouse is a nonstarter)

Denis Pitcher
12th December, 2012 @ 11:01 am PST

You said it yourself, they impacted 1% of the entire tablet market with only online sales and individual store sales. If you consider that Microsoft stores (30 in north America) represent .0001% of the 40000 retail locations both on and off line in the world then your prediction is off, way off.

I don't think we'll be seeing an accurate number until we see how total retail sales go, and remember you can get windows 8 for other tablets, your xbox, and your phone. Where you can only get ios for ipad on an ipad.

If anyone has used the new windows 8 you'll notice tht you hardly surf the internet, you just sort of watch your start screen and if something interests you then you look.

Innovatorfred
12th December, 2012 @ 11:53 am PST

The main thing about Surface is it provides choice to the market and should have been about driving prices down. Microsoft didn't see it that way, but that's their problem. I have a Playbook I got for real cheap but I don't use it for much, I sideloaded robo defense on it and can play freecell on it. It does email but the implementation is buggy (keeps asking me over and over for the same password). The browser is slow and frustrating. I assume the iPad is the same, or at least at 10" size is also too small. My Win7 laptop works good enough. Like so many other people in the world, I don't need to have the latest greatest thing. I'm fairly up to date, that's good enough for me. I can't afford to keep buying more and newer gadgets in search of the elusive one that does everything I want (none of them do that).

Grunchy
12th December, 2012 @ 12:07 pm PST

For the average people:

Apple- sells desktops, laptops, tablets, phones and ipods with several operating systems include. Has large market share for what it does.

Microsoft- sells software and operating systems on the rest of the desktop, laptop, and 1/2 the remaining tablet and phone market (split with android) as well as sell its own tablets and phones (along with partner company products). They also have their gaming system (xbox) game software, and hardware devices (ex. kinect) they sell to people and they to have large market share for what it does.

Both have nitches. If you say Microsoft sucks at innovation then I must ask where's Apples gaming system? Microsoft is slow moving but is an innovator. Look no further than the Kinect, no one else is making anything like it and it's starting to be applied in everything from Aircraft to X-ray machines. Likewise Apple has truely reliable products that are game changers when they are introduced. And both steal ideas from each other and everyone else when they can.

Bottom line for this article they over priced and underproduced (keyboard should have been included).

Both comapnies should try packaging products (sell several or all items together at a discount to get more sales).

Matt Fletcher
12th December, 2012 @ 01:07 pm PST

Google has the right strategy with the Nexus 7 and 10. Make a good tablet and sell it for a less than the iPad. This is the classic strategy that the Japanese car companies took trying to get in the US market. You start by selling the super cheap, well-made Toyopet to get your foot in the door. Then, when you've established a market, you start selling the Lexus luxury car.

Ken Dawson
12th December, 2012 @ 01:34 pm PST

Now they will have the confusion of having 2 incompatible versions of Windows on tablets that both use metro UI

Daishi
12th December, 2012 @ 02:09 pm PST

@Denis Pitcher - excellent review based on actual experience. Thank you!

mados123
12th December, 2012 @ 02:43 pm PST

Ms Surface looks cool on the advert until you see the Price!

If it shipped with the keyboard for the same price as an IPAD maybe it would be competitive.

I have a Win 8 main PC. Win 7 Laptop and an Android Tablet.

The only reason I use MS is for Game Support.

At least Win 8 came out at a reasonable price.

Loss leaders are needed to get people to buy and then gain you money on the Apps not on the Hardware and the Apps.

Kindle and Ps3 Sony have done very well with this method.

If Linux supported games better I would switch to that OS.

Ian Gillespie
12th December, 2012 @ 02:43 pm PST

I think that, as with Windows Phone, the biggest problem is Microsoft themselves.

People are rightly skeptical of any product they put out at this point, except for their developer tools. Their quality is hit and miss, and they seem to have forgotten everything that they ever did right.

I've been using Office as my primary work tool since Office for Windows 1.0, but at this point, I'm fairly desperate to find something to replace it with, because Office 2010 is so screwed up as to be unusable.

Jon A.
12th December, 2012 @ 03:03 pm PST

If Microsoft were smart they would scrap the OS and just make android tablets. Or just stay out of the business. I have used all of the windows since 1.0. Windows sucks, the idea sucked, mouses suck, but some how windows ended up in almost every computer. Microsoft should focus on making games, its really the only thing they are good at.

Michael Mantion
12th December, 2012 @ 04:39 pm PST

Everyone has an opinion. I think that this has been one of Microsoft's more innovative moves. I don't hear people saying they copied someone. Anyhow..... I like the Live Tiles and I've gotten use to the two desktop environments. I really like the apps that support the Metro UI. I do have Windows 8 Pro running on the Asus EP121. Intel versus the Arm based processor running on the Surface RT. I love the design of the Surface. I'll just wait to get the Pro version. I'll be glad to only carry around 2 devices when I travel. My Galaxy III and my Surface Pro which will outperform any of my current tablets.

Lee Jordan Monagan
12th December, 2012 @ 07:12 pm PST

Micheal, I have to agree. As a former Amiga user, I was mad when Commodore shot themselves in the foot due to inept management. OS's and chips that were used by the likes of NASA and Disney, and also generated the Babylon 5 series. AmigaDos was doing in 1986 what Windows 95 claimed to do.

WinDoze has always been what I call a self-polluting operating system. Back when Win95 was in use, the computer would have to be wiped and rebooted every 4 or 6 months.

Then Win98 came out, which Microsoft said, "just install it over 95", which worked for about 2 months, then crashed hard. Over the years, it's gotten to a point were it works most of the time.

I should have bitten the bullet and just learned Linux.

VoiceofReason
12th December, 2012 @ 07:27 pm PST

As per my view, if the surface price is same as iPad, then why should we buy surface. Hence, buy iPad and enjoy the outstanding features of apple.

SPINX INC.
12th December, 2012 @ 10:40 pm PST

As usual, dismissing MS is a mstake. The PRO version of the Surface is what we are all waiting for, and the ARM version was really a mistake to push so hard. There are hundreds of million corp. windows users who will kill to get that, instead of a laptop, so it if can last 8-10hrs and do just as much work, then it will not only take over the laptop market, but dominate the Corp. world. We are already looking at switching to the windows phone, so Outlook intergration is super easy, and single signon will control the whole process. You have to remember, under the surface of the public use, there is work or corporate use, and that is WAY bigger than given credit. Wait to see how fast the PRO flies off the shelf before getting so gleeful about a possible misstep.

Wally Wanks
13th December, 2012 @ 06:45 am PST

People complain about the price, yet talk about how the Surface Pro is the better product.

Yet Surface RT ships with a fully functioning copy of Office included in the system price.

The only mistake Microsoft made was not including the keyboard in the cost... but then again...it's got a USB port AND it's supports blue tooth keyboards and mice.

You guys are funny.

Even if Microsoft has only moved 800k units....that's 800k at a 40% profit margin. If they move all their surface units it's a win for Microsoft regardless of what you may think.

Dre' Reavis
13th December, 2012 @ 01:58 pm PST

I walked away from MS over a decade ago when I got fed up with quirky, bloated and badly written software, the incessant upgrade route and the overall lackluster quality. When I saw OSX.1, I felt I could have Unix and eye candy. I've never looked back, only once to play a Windows centric game. I found an old Dull and hide it away from sight. Poor ugly thing!

Today I run a 4 year old iMac 27 inch as a central computer that just works. I have a first generation iPhone and a 3rd gen Touch for Music, a 4s for my cell phone, a MacBook Air that is light and just damn work well all the time. I finally bought a wireless Base Extreme and an extender. Everything is seamless and I don't have to deal with that MS hodgepodge. I even got my wife to buy a MacBook in 2007. Oh and my 2004 PowerBook still works. Can MS products (hardware included) do that? No.

Surface was over-hyped as soon as we heard about it and made little sense. MS use to do things like that 10 years ago. It's as if they havn't learned their lesson. They are becoming irrelevant with each new iteration. As far as I can see, Windows 2000 was good, the rest was fluff and updates. Vista? What the hell? Nah, they loss consultants like a long, long time ago, surface or not. MS innovate instead of copying. You're just not cool. Build on your strengths, not on your lackluster appeal. Harsh!

33Nick
14th December, 2012 @ 08:11 am PST

There is one thing you are not thinking about... business.

No business is going to go to a laptop/desktop + tablet model. It simply does not make sense fiscally or technically. At home it can work and can make sense if that's how you're set up, but in business this model will never be adopted. If tablets don't enter the business world than the iPad will continue to dominate and the Surface will go the way of betamax, but if you believe (like I do) that tablets will eventually hit the business market the Surface is the first step in that direction. Multi tasking, full internet support, office, network drives, printing, usb port, full laptop keyboard... these are ALL things necessary to break into that market and is the reason why you don't see any major companies outside of Apple using the iPad for anything more than checking email.

Jake Luby
26th December, 2012 @ 11:54 am PST

I've used Windows 8 and I like it... Lets face it.. Microsoft has failed at its marketing strategy and keeps failing.

In NSW, Australia I have not seen any Surface ads. Its almost like they have too much cash and don't give a damn.

Tomasz Wawrzyczny-Than
22nd January, 2013 @ 09:38 pm PST

I recall when Microsoft was first releasing the XBOX to compete with Sony & Nintendo they had a rough start as well. The thing about Microsoft that no one can deny, whether or not you like it, they succeed eventually at what they want to. They have the resources to fail, make adjustments, and try again until they eventually get it right and become the dominant market leader. Ask Sony if you don't believe me.

Michael Ward
29th May, 2013 @ 01:33 pm PDT
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