Microsoft will sell 3 million Surface tablets in Q4, but not at $199: analysts

August 21, 2012
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IDC mobile analyst Bob O’Donnell said that three million Surface tablets will be built before the year is out (including both ARM and Intel versions), but stressed that Microsoft will have to sell the product outside of the Microsoft store.

“If they build a few million units there’s no way they can sell it through Microsoft store only,” said O’Donnell, when talking to 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.”
 
The IDC analyst is also unconvinced the Surface will retail at the recently rumored price of $199, although he did hint Microsoft could try and hit such a price point with an Office subscription package.
 
"There could be two ways to get Surface. Buy it outright for, let's say, $599. Or $199 for a two-year subscription and you can get X, Y, and Z – which, by the way, works out to more than $599. But any Windows RT product comes with Office so that knocks out that theory."
 
Microsoft CEO Steve Ballmer has already publicly said that the firm hopes to sell ‘a few million’ Surface tablets in the next year, but one analyst claims that the Redmond giant is being very conservative with its targets.
 
“To put in context, Amazon sold almost 5 million in the last quarter of last year,” said Forrester analyst Sarah Rotman Epps, when speaking to Wired recently. “3 million, if it’s correct, is honestly sort of a conservative number. 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.”
 
The first tablets from Microsoft’s tablet family are to launch on October 26, offering versions based on Intel and ARM processors. And based on these latest projections, the Surface will certainly have to go some way to topple market leader Apple, which sold 17 million iPads in Q3 and which holds a 68% share of the tablet market.

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