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Early Surface Sales Pitiful
Nerval's Lobster writes "Microsoft has earned $853 million from sales of its Surface tablets, according to the company's annual Form 10-K filed with the SEC. That's a bit of a disaster, to put it bluntly. Earlier estimates put Surface sales at roughly 1.5 million units; the $853 million figure reinforces that projection. By comparison, Apple sold 14.6 million iPads in its last quarter alone. Adding insult to injury, Microsoft spent quite a bit producing and marketing Surface. The Windows division's 'cost of revenue increased $1.8 billion, reflecting a $1.6 billion increase in product costs associated with Surface and Windows 8, including a charge for Surface RT inventory adjustments of approximately $900 million,' read the Form 10-K. 'Sales and marketing expenses increased $1.0 billion or 34 percent, reflecting an $898 million increase in advertising costs associated primarily with Windows 8 and Surface.' Overall, Microsoft's Windows division earned $19.2 billion in its fiscal 2013."
In other words, Microsoft spent more money on advertising the Surface than they took in selling it.
Yes and No.
Joe Sixpack** doesn't give a damn about the lock-in per se (see also the iPad). They want something that has flexibility, durability and (apparent) speed packed into an easy-for-them-to-grok mobile interface. A pretty UI/graphics package is also a must. Note that the iPad does all of that - it doesn't come with an instruction manual, yet most non-techie folks can pick it up for the first time and do what they consider to be useful stuff with it in less than five minutes.
Surface RT OTOH? Pure fail in this department.
** sample size = one spouse, all my relatives, and a handful of non-tech friends. Your own mileage may vary.
Quo usque tandem abutere, Nimbus, patientia nostra?
Remember when the early XBOX sales looks so bad they thought it might drag Microsoft under?
Is it just my observation, or are there way too many stupid people in the world?
I took one look at the intro video and was blown away, I thought that Surface was as cool as dammit. But then I assumed that it would be priced at Microsoft prices. Instead they tried to sell it at Apple prices. Had they, from the get go, offered iPad coolness at a Windows price, I think they might have made a go of it.
The fundamental issue is that people already have a choice of multiple shitty locked down tablets, for which they can get far more applications for just about the same price or less.
What reason does anybody have to buy a SurfaceRT?
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The problem with the Surface RT was that it was best described by what it couldn't do.
"It's like iPad, but it doesn't run apps from the Apple store."
"It's like a Windows PC, but it doesn't run all Windows software."
"It's like a laptop, but you can't type on it in your lap.
Microsoft completely fucked up the marketing. If Surface RT came out three years ago, it would have dominated, but Apple and Android have already shaped user expectations. They created a device that runs a browser and MS Office...enough to cover 99% of computing use...and it has twice the battery life, half the weight, and a third of the cost of an comparable ultraportable laptop. It should have been a killer piece of gear, and the engineers probably thought they created something really special. Too bad Microsoft thought it would just sell itself in market where existing tablets had already gone the content-comsumption only route.
Microsoft's view was that the iPad and similar Android tablets were fine for media consumption but were really lacking when it came to creating. Having a physical keyboard without adding significant weight or bulk was a killer feature in their mind.
A lot of people felt that Microsoft did an excellent job in designing the keyboard. A key point they missed though is that once you stick a keyboard on a tablet like that there's not much distinction between it and a small laptop. So why not just get a laptop?
One of the nice things about a tablet is that you don't need an flat surface available in order to use it. Microsoft's own Surface commercials show a bunch of people sitting around a table. A tablet that requires a desk in order to take advantage of one its key features isn't going to set the world on fire.