Forgot your password?
typodupeerror
Microsoft Businesses

Early Surface Sales Pitiful 251

Posted by Unknown Lamer
from the things-no-one-wants dept.
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."
This discussion has been archived. No new comments can be posted.

Early Surface Sales Pitiful

Comments Filter:
  • Marketing expenses (Score:5, Insightful)

    by bonch (38532) * on Wednesday July 31, 2013 @11:36AM (#44435829)

    In other words, Microsoft spent more money on advertising the Surface than they took in selling it.

  • by SkunkPussy (85271) on Wednesday July 31, 2013 @11:38AM (#44435855) Journal

    Is the fundamental issue that people are sick of using shitty computers with shitty locked down versions of windows all day at work, so they don't want more of the same bullshit for their personal devices?

    • Re: (Score:2, Insightful)

      by bonch (38532) *

      People have invested in iOS and Android apps, leaving little incentive to switch. Additionally, WinRT lacks functionality compared to Win32. Microsoft has become reactive and conservative, following what others do rather than leading. They had the opportunity years ago to shake things up with the Courier tablet, which was focused on content creation. The project was killed because Bill Gates wanted it to be a more traditional device that interfaced with Office.

      • by jedidiah (1196)

        The level of attachment to either leading mobile platform is highly disputable. The apps for both platforms tend to be dirt cheap or just plain free. The average Apple or Android user probably has less invested in there platform in terms of "apps" than the cost of a single PC game.

        The real vendor lock is going to come from platform only entertainment content like music or books or movies.

    • by Anonymous Coward on Wednesday July 31, 2013 @11:51AM (#44436021)

      Is the fundamental issue that people are sick of using shitty computers with shitty locked down versions of windows all day at work, so they don't want more of the same bullshit for their personal devices?

      No, the problem is an inexplicable tablet interface on the new desktop OS and a tablet which seemed to be sold on the idea that it does absolutely everything that the laptop which you already have does in exactly the same way, not to mention it running that bizarre new interface people keep muttering about because it's apparently terrible.

    • by Penguinisto (415985) on Wednesday July 31, 2013 @11:51AM (#44436031) Journal

      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.

      • by jedidiah (1196)

        > A pretty UI/graphics package is also a must. Note that the iPad does all of that

        You need to update your propaganda. Apple no longer has the lead in tablet market share.

        The problem with ignoring experts or deriding them is that sooner or later the rube consumer is going to depend on experts. It can be the neighborhood free tech support guy or your neighborhood auto mechanic. It can even be the hardware manufacturer.

        Sooner or later you are going to need that guy. His opinion is still relevant even if hi

        • by Penguinisto (415985) on Wednesday July 31, 2013 @01:34PM (#44437351) Journal

          You need to update your propaganda. Apple no longer has the lead in tablet market share.

          Has nothing to do with propaganda, or even who has the lead. However, it has everything to do with why the Surface RT failed utterly. The UI is confusing and ugly, and the flexibility (read: app support) is simply not there. Battery life is a big question mark, and half the internal storage ("disk") space on the low-end model is eaten by stuff that the consumer sees no use for (the recovery partition, the bloated-as-hell OS, etc.)

          Replace "iPad" with "Android" if it makes your phallus turgid - machts nichts, my point still stands. Th3e RT sucks because it fails to meet the requirements I outlined up there.

          If you can prove me wrong, please do so.

        • by PPH (736903)

          The problem with ignoring experts or deriding them is that sooner or later the rube consumer is going to depend on experts.

          But the experts have been bought or discounted. The MCSEs have a vested interest in propagating Windows. Its defects are their job security. The others have been discredited as Apple or Linux fanbois. Besides, people become emotionally invested in their choices. Once they have been led down a bad path, they are less likely to listen to alternatives than when they made their original choice.

          Sometimes all you can do (as that expert) is to walk away. Even Dr. House has to call the time of death on occasion.

      • Agreed, the "how do I turn this fucking thing off" question has hit me a few times after people get frustrated enough to call me.

    • by mwvdlee (775178) on Wednesday July 31, 2013 @12:03PM (#44436185) Homepage

      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?

      • by CastrTroy (595695)
        Exactly. When they first announced it, there was speculation everywhere that it was going to cost $200-$250. Then they released it and it turns out that it was $500 without the keyboard/touch cover, which was the whole thing that actually made it different then every other tablet out there. By the time you get the Surface RT and a touch cover, the price was close to $600, and cost more than an iPad. Had it been close to the speculated $200 price, I would have probably purchased one. But at $600 it wasn't
      • What reason does anybody have to buy a SurfaceRT?

        The Surface RT is one of the few tablets which can run Microsoft Office (not the web version - an actual native application). Office is not available on the iPad or Android Tablets, and since the RT is cheaper than the Surface Pro and any other competing Windows 8 tablets, that makes it the cheapest tablet available to run Microsoft Office.

        Some people LIVE in Microsoft Office to the point where they don't need anything but it and a browser to do their work, w

    • Yes.

      I'd gladly purchase a Surface Pro (with Real Windows) for a little more than the price they're now charging for the ones with RT. But $900? No, thank you.

      I'd rather have Android or iOS than Windows RT, if I'm buying a tablet that can't run Windows apps.

      On a related note: 'Wonder why Apple doesn't try a tablet with OS X for a bit more than an iPad?

      • by Aaden42 (198257)

        On a related note: 'Wonder why Apple doesn't try a tablet with OS X for a bit more than an iPad?

        Because Apple figured out that touch & mouse based devices need a different UI paradigm to be useful.

        If you want ultra-portable OSX, you get an Air. If you want a touch screen, you get an iThing, in your choice of three sizes (four if you count pre-iPhone 5 sized devices).

    • Any computer you use at work will be locked down. Get over it.

      For the record, Apple machines are more of a PITA where I work than anything else.

    • by MarkvW (1037596)

      That's nonsense. Apple is way more locked down than even locked down Windows.

  • by Anonymous Coward

    What, did someone think huge numbers of people would toss their IPads and buy a new Surface instead?

    The market was already pretty well penetrated, and there was never any reason to believe that the introduction of a new product would increase demand.

    • by unimacs (597299) on Wednesday July 31, 2013 @12:47PM (#44436779)
      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.
  • Consumers & business have their share of distate for BSODs and other disasters that cause them to go to other devices.

    • Re: (Score:2, Informative)

      by CastrTroy (595695)
      I haven't had a BSOD in years. The only time I reboot my machine is for updates. Windows used to be unstable, but more recently I find it rock solid. I wonder if all the problems I had in the past with Windows was due to cheap/faulty hardware and bad drivers, and had nothing to do with the OS itself. I don't think I've ever seen any of my Windows 7/8 machines crash at all (certain applications will crash but not the OS). Windows 8, which many people complain about is actually quite nice, if you can just
      • Re: (Score:3, Interesting)

        by oGMo (379)

        Well hooray for you, but I have to reboot win8 (game machine) constantly. Apparently, it has a well-known bug where it sends a reset command to the hard drive under certain conditions. This can cause the drive to go away until you power-cycle the machine (even the bios doesn't see it). It's not a BSOD: everything just stops working and you lose anything you were doing, because the drive it was running off is now gone. (It also blows away UEFI stuff, but fortunately you can get it booting grub again from

      • and I don't have to have screen real estate taken up by the quicklaunch icons (which I generally have about 15-20 of).

        What do you mean with this? The quick launch icons sit in the taskbar and thus don't take up space from application windows anyway.

        • by CastrTroy (595695)
          If you have 15-20 icons on your quicklaunch bar, they have to spread most of the way across the screen, taking up valuable space from the task bar. I personally don't like to group my taskbar items, because I find it actually makes it harder to find stuff. So my task/quicklaunch bar gets really crowded, really fast. With no quicklaunch icons, I have a lot more room for the stuff in my task bar.
          • Shove the taskbar to the side and stretch it out to 128 pixels wide. You can easily get 40 quick launch icons on the taskbar and you can add a toolbar folder and have launchers for all your favourite docs right there.

    • by Anonymous Coward on Wednesday July 31, 2013 @12:06PM (#44436233)

      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.

      • by jd2112 (1535857) on Wednesday July 31, 2013 @12:48PM (#44436803)

        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.

        I avoided the Surface because I'm not coordinated enough to do the dance moves they show on the TV commercials.

  • According to loopinsight.com Apple sold over 50 million iPads in the time it took Microsoft to sell 1.7 million Surface tablets.

  • by khr (708262) <kevinrubin@gmail.com> on Wednesday July 31, 2013 @11:47AM (#44435987) Homepage

    Microsoft... There's a name you don't hear every day... They're still around?

    • by Tarlus (1000874)

      Yeah, it has been a couple hours since the last article about RT's failure. Slashdot was about due to post another one.

  • I'd pick one up for 100-150 bucks. Get that sucker open sourced and generate some good will MS. You are not going to do anything else with those.
  • Failed Marketing (Score:5, Interesting)

    by bradgoodman (964302) on Wednesday July 31, 2013 @11:51AM (#44436033) Homepage
    Really?!??!

    All those ads with people dancing around snapping covers on and off - opening and closing weren't enough to evangelize the masses as to the virtues of the technology?!?

    As much as I hate Microsoft - it's sad to say - that the [very, very] few people who I know who actually had a Surface had nothing but RAVE reviews about them. The summary was: "Size/weight of an iPad - but with a real keyboard. I could take it to meetings, and actually run Word, Excel, PowerPoint, and Outlook. I could actually take notes with the keyboard - and not some "add-on" iPad type keyboard which made the iPad as big and bulky as a small laptop or netbook".

    So in short - it was a real "productivity" device - not like tablet, which I still don't think is really good for anything but *light* web browsing and watching movies on a screen, the size of what we used to watch them on in the 70's.

    • by cusco (717999)
      I saw a lot of people on the MS campus comparing their Surfact RT to their iPad (we didn't have designated areas to work in, so sat in the public areas), and the general take seemed to be that they were both useful machines, with two different uses. iPad was the better content-consumption device, Surface was the better work-production (content creation?) device.
      • by gl4ss (559668)

        well that explains it then.

        if ms's employees work consists of stuff they can do on surface rt, then they're fubar - office and metro apps.

        unfortunately it's only better content creation as well if you don't have kb with the ipad and if you do they're about the same.

    • Really?!??! As much as I hate Microsoft - it's sad to say - that the [very, very] few people who I know who actually had a Surface had nothing but RAVE reviews about them. The summary was: "Size/weight of an iPad - but with a real keyboard. I could take it to meetings, and actually run Word, Excel, PowerPoint, and Outlook. I could actually take notes with the keyboard - and not some "add-on" iPad type keyboard which made the iPad as big and bulky as a small laptop or netbook".

      So in short - it was a real "productivity" device - not like tablet, which I still don't think is really good for anything but *light* web browsing and watching movies on a screen, the size of what we used to watch them on in the 70's.

      This is exactly what I love about my Surface. I take it to a meeting, drop open the cover, and tap the Word button. Boom, I'm ready to go, then save everything to Skydrive so I can look it up from anywhere. The people with iPads (everyone else, tbh) tend to have to fiddle with the bluetooth settings and figure out where Pages saves stuff. My Surface just sort of works. YMMV, IMO, and all those other fun acronyms apply.

    • I think the core problem is that the market - as a whole - doesn't want real productivity devices. They want things to replace their desktops and laptops, but more portably. They want web browsers and YouTube players. They want messaging. They want simple photo editing. A few people here and there want office suites and development environments, but their numbers are dwarfed by those who just want to "carry the Internet around" easily so they can interact with it in a fun way.

      I'd buy a tablet that booted di

    • by istartedi (132515)

      I would have have shown PC Guy sitting with somebody in a cafe, talking about the selling points of the device. Then 25 seconds in, Mac Guy brings them their drinks.

    • As much as I hate Microsoft - it's sad to say - that the [very, very] few people who I know who actually had a Surface had nothing but RAVE reviews about them.

      I'm guessing those people had the Surface Pro, not Surface RT. Because those are the people I've heard who had good things to say about it.

  • by Overzeetop (214511) on Wednesday July 31, 2013 @11:52AM (#44436051) Journal

    Remember when the early XBOX sales looks so bad they thought it might drag Microsoft under?

    • by idobi (820896) on Wednesday July 31, 2013 @12:06PM (#44436227) Homepage
      Historically, the Xbox division is still not profitable. It's net -$3B from 2001
      • by rahvin112 (446269) on Wednesday July 31, 2013 @12:59PM (#44436975)

        They will never ever make money on the XBOX, by the time they start making money on the console it's time to replace the console with a newer version, and that's after they dragged the refresh cycle out 3 years longer than the previous cycles.

        If I was a shareholder I would be livid, that money could have been put into share purchases or dividends for far more return to the owners.

    • by roc97007 (608802)

      Isn't Microsoft still buying the xbox market (by selling at a loss)? I guess it's possible that they could do the same with the Surface, to continue playing in that space. Or it could go the way of the Zune.

      • Currently Xbox profitably varies by quarter. I would expect losses for the next several quarters as the Xbox One is launched. Overall Xbox is still in the red if you just look at the hardware side. With licensing added in, it might be at a break even point.
    • by tuppe666 (904118) on Wednesday July 31, 2013 @12:21PM (#44436435)

      Remember when the early XBOX sales looks so bad they thought it might drag Microsoft under?

      Except the early Xbox sales where great. From a 2001 article http://uk.gamespot.com/news/microsoft-reports-strong-xbox-sales-2829778 [gamespot.com] "Xbox sold out as soon as we launched, and we're selling systems as fast as we can produce them. More than 100,000 units a week are being delivered to retailers, so game players are likely to find Xbox systems throughout the holiday season. With one of the best launch lineups ever, I understand why Xbox is the most sought-after gift for the holiday." "

      Not sure why people are trying to rewrite history.

    • Yeah, I remember that. It was almost as funny as when they had so many recalls that they had to spend absurd amounts of money to replace most of the XBox user-base's hardware. Or when they released the Kin phone and it failed miserably? Hilarious.

      It's fun remembering Microsoft's failures. And it's impressive that Microsoft still squeezes enough money out of Windows and Office to keep paying for these failures.

  • 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.
    • She was actually the perfect target audience for a Surface Pro. She wanted something tablet-sized but also a PC, high resolution, touchscreen, optional keyboard, and was willing to pay ultrabook prices for it. The Surface Pro checked off pretty much every box in what she was looking for and she was halfway out the door to buy one.

      Then came ifixit's teardown and repairability review [ifixit.com]. Glue? Are you kidding me? If it breaks outside of warranty, you have a very, very expensive paperweight. They only of
  • According to the article, the RT version outsold the Pro version 2-to-1. Yet everyone seems to agree that RT is useless. The RT is most likely selling based on low price point. The Pro version isn't selling at all. Disaster is putting it mildly.
    • Re:RT more than Pro? (Score:4, Informative)

      by CohibaVancouver (864662) on Wednesday July 31, 2013 @12:03PM (#44436191)

      The Pro version isn't selling at all.

      It's a pity, because I've got a Pro and it's a pretty kickass machine. I agree the RT doesn't make sense, but the Pro is well thought out.

      • by Immerman (2627577)

        If only they weren't trying to sell a low-end laptop-with-touchscreen at a high-end laptop price they might be on to something.
        - Typed on a lightweight 15" $300 dollar laptop that does almost everything I as a techie want out of it

      • Problem with the pro is the price. I can buy a convertible ultra book for about the same price with more power and do the same thing.

  • by roc97007 (608802) on Wednesday July 31, 2013 @12:02PM (#44436173) Journal

    The Surface is a wonderful device that I love to use. My seventeen kids all fight over the privilege to use it and they all want to replace their iPads with a Surface. They're just flying off the shelves, and the local stores can't keep them in stock. I have to drive 200 miles to buy more. At work our productivity increased 1,022% when we replaced all of our ipad and android tablets with the Surface. It's so cute and convenient, I just can't keep my hands off of it.

    There, did it for you. Cut and paste as necessary.

  • The Surface failure to me entirely comes from their dual marketing of the Pro and RT versions, which we all know was brutally confusing to the public due to the fact the interface was identical but one could run desktop apps and one could not. Most people could care less about ARM vs x86. They see Windows they want to be able to use Windows just like at home/work. Some say that's a reason people would avoid the Surface where to many I think it would have been a plus.

    If MS had ditched RT and only rele
  • You don't go into a runaway market at the same price as the leader.

    Microsoft should have significantly undercut the iPad pricing model if they wanted to have any hope with RT. The only useful differentiation that it has over Android and iOS tablets is the ability to run Office and most people with the consumer model tablets don't want to do that.

    They really should just have skipped RT altogether. It just confuses the market.

    They should have stuck with the Pro only, and marketed the hell out of the fact

  • by JamesA (164074) on Wednesday July 31, 2013 @12:37PM (#44436643)

    Jeff Atwood (of CodingHorror, StackOverflow fame) praised the Surface RT:

    I can't even remember the last time I was this excited about a computer. [codinghorror.com]

  • Or you could say that with their first revisions of Surface, Microsoft has already managed to pull 10% of Apple sales. That's not bad for a new product working against an established and rather enthusiastically supported competitor.

  • by JonJ (907502) <jon.jahren@gmail.com> on Wednesday July 31, 2013 @12:38PM (#44436655)
    Microsoft is a brand that inspires no confidence from consumers, and the only one who actually likes them are simpleton sysadmins.
  • I cannot think of one single Microsoft product, hardware or software, that I've wanted to purchase in the last 15 years, whether as a consumer or head of tech departments with big budgets to spend. Lackluster products, poor user-acceptance testing, poor debugging prior to release, poor security, miserable customer support (on contract or per incident), awful product design, and on and on. The last thing I took momentary note of was Kinect, but I have become so disenchanted with Microsoft across the board

  • by slashmydots (2189826) on Wednesday July 31, 2013 @01:33PM (#44437343)
    Microsoft! nobody wants your stupid touch-everything bullshit. Dump your overpriced mobile devices, dump the Metro crap, and release what your customers ACTUALLY WANT! Seriously!
  • I, for one, would like to see Microsoft combine the Surface tablets with their brilliant server OS strategy. Picture, if you can, a tablet that only runs a PowerShell prompt floating in a sea blue. Yes, friends, you can own the new Surface Core. It's like Windows, only without windows, and in a convenient tablet format!

  • by Spiked_Three (626260) on Wednesday July 31, 2013 @01:38PM (#44437413)
    And they all 100% suck.

    Apple locks you in - you do what Apple allows and forces, including some of the crappiest written software ever imagined (iTunes). That also forces you to pollute your desktop PC with more crap (iTunes).

    Android & Apple hideous development environments. Seriously, yes they can do anything, so can machine language code written in hex, that is not the point. The point is Apple runs this proprietary disgusting mix of object oriented and non-object oriented legacy crap. Android uses a semi decent language (potentially) but surrounds it with a hideous never considered anything but command line crap they call a UI. It depends on a buggy, poorly designed open source IDE

    Microsoft has a decent language, the best UI in existence, and arguably the best IDE, but you cant run anything but Internet explorer, you cant deploy it conveniently to your own machine, and certainly not to anyone else's. It's a 'me too' clone with all the bad parts and none of the good parts.

    They let the people worried about money get in the way of making a good product, and the result is failure (serves them right).

    Gates made MS at a time when he ignored the bean counters and made Windows despite OS/2, to be better, not more profitable. The profit comes automatically. When you force profit in over being a good product, the surface is what you end up with. R.I.P. MS, the good you will be missed.

Never tell people how to do things. Tell them WHAT to do and they will surprise you with their ingenuity. -- Gen. George S. Patton, Jr.

Working...