Microsoft is set to build slightly more than 3 million Surface tablets by the end of 2012, analyst Bob O’Donnell told CNet. That’s a larger-than-expected number for Microsoft’s entry into the tablet market, especially in light of the company’s plan to sell Surfaces only through its official retail and online stores. But it’s by no means aggressive.
“To put in context, Amazon sold almost 5 million in the last quarter of last year,” Forrester analyst Sarah Rotman Epps told Wired. “3 million, if it’s correct, is honestly sort of a conservative number. That would mean that they are expecting to sell more than Windows Phone. So Microsoft is expecting the Surface to sell better than Windows Phone but not as well as the Kindle Fire? That’s sort of pessimistic.”
Still, building 3 million tablets in 2012 doesn’t really gel with what the company has publicly stated. At the Worldwide Partner Conference in July, CEO Steve Ballmer told attendees that Microsoft planed to sell “a few million Surface PCs” in the next 12 months. The statement suggested that Microsoft saw itself as only a small part of the Windows ecosystem, which Ballmer estimated would sell 375 million PCs in the coming year.
So how well does Microsoft really want Surface to do? ”I see that less as reversing his words as [it is] making sure to under-promise and over-deliver,” Epps said.
But the numbers might suggest that the company has bigger plans for Surface than it initially let on.
“If they build a few million units there’s no way they can sell it through Microsoft store only,” O’Donnell told CNet. “So I think that they’ll sell it through traditional retail also. You can’t build that many products without having a much wider distribution strategy. They just haven’t shared that [strategy] yet.”
For comparison, Apple sold 1 million iPads in the first month of sales back in 2010. But today’s market is an entirely different landscape, where consumers have a much higher demand for tablets. Apple sold 17 million iPads in Q3 2012 alone. Compared to these numbers, the 3 million Surface tablets starts to look small. But Apple is a special case in the tablet market. A more appropriate comparison might be Google, which sold an estimated 1 to 1.5 million Nexus 7 tablets in that device’s first five weeks and is expected to sell 6 to 8 million by year’s end in the first year.
Against those numbers, and after Balmer’s statements from July, 3 million would seem just about right.
Microsoft is expected to launch the Surface RT on October 26, while Surface Pro will go on sale three months later.