Microsoft Surface sales taking off slower than expected, sources say - The Guardian

Microsoft has only sold about 1m Surface RT tablets since its launch in October 2012 and about 400,000 Surface Pros, which run the full version of Windows 8, since their release a month ago.

The figures are cited in a report by Bloomberg, citing sources who know about the sales figures.

That compares to about 89m PCs and 52.5m tablets sold worldwide during the fourth quarter, and the figures have almost doubled in the three months since – suggesting that the Surface tablet is making almost no impact on the market.

While Microsoft has not released official sales figures, it has poured significant development effort into Windows RT, which runs a version of Windows 8 on chips with the ARM architecture, rather than the Intel architecture that more than a billion PCs – and the Surface Pro – use. On unveiling Windows RT in 2011, Microsoft suggested that it saw the ARM architecture as an increasingly important platform for low-power, long-life devices.

But the poor reception for the Surface RT suggests that consumers and businesses have so far disagreed. Bloomberg says that Microsoft ordered about 3m Surface RTs in its initial planning, and analysts had forecast that it would sell millions in the three months to December.

However, reports of slow sales emerged almost immediately. In November, supply chain sources suggested that Microsoft had halved its order from around to 4m by the end of 2012 to 2m.

The Surface, in both forms, puts Microsoft into competition both with Apple's iPad and Google's Android partners, as well as its own OEM partners making Windows devices. But the story for Windows RT has been disappointing, with Samsung announcing recently that it would not be selling its Ativ RT PC anywhere except Asia, having apparently seen poor sales in Europe and the US.

Finding success with Surface is important for Microsoft, which makes more than half its profits from Windows licences on PCs, and roughly the same from licences for Microsoft Office on those PCs. The shift to tablets is also depressing sales of PCs, which threatens its long-term revenues. Texas Instruments, which makes chips used in laptops, and Hewlett-Packard have warned of weak demand in the PC segment in the first three months of the year.

"The tide continues to go out on PC sales as consumers and emerging market users prefer tablets and smartphones to Windows based PCs," Rick Sherlund, an analyst at Nomura Holdings Inc., wrote in a report this week quoted by Bloomberg. "Windows 8 has failed to ebb the receding tide."