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Surface tablet compared to Zune, Kin in brutal analyst assessment

At best, Microsoft's Surface tablet lineup will take a distant third behind iOS and Android in the market, analysts have predicted. At worst, it will become a laughing stock like Zune.

I know some of you are getting tired of the drum beats of negativity toward Windows 8 and Surface. But in light of Microsoft relenting on the opposition to Office 2013 licensing, it's clear that our voices can be heard in Redmond, and quite frankly, I'd rather nip another Vista in the bud rather than let it go on for years.

The latest bad news comes in a double dose. First up was a brutal assessment from MKM Partners’s analyst Israel Hernandez, who cut his target price and revenue estimates on Microsoft, which he blamed on poor sales of Surface and Windows 8.

RELATED: Windows 8 apps are missing in action

Hernandez cut his Q3 estimate for Surface to 600,000 units from a prior projection of 800,000 units. For this year and next fiscal year, he projects sales of 2.3 million units and 4 million, respectively. Previously, he projected sales of 2.9 million and 6.6 million.

Most damning was his comparison of Surface to the Zune and Kin.

We are also lowering our forecast for Surface sales, with Surface RT on track to join Zune and the Kin in the great consumer electronics discount rack in the sky. While the prospects for Surface Pro are better, current price points on the $999+ hybrid tablet/notebook are not competitive for mass- market adoption and will need to come down, in our view, at the sacrifice of margin and further alienation of the OEM channel, which, in our view, is currently in open revolt.

I have to think the OEMs are furious. They are suffering for Microsoft's intransigence when it comes to Windows 8. The question is when the will revolt spill out into the open for all to see.

The second blow came from IDC. It issued a four-year projection of tablet sales, and it's pretty much an iOS/Android world. IDC raised 2013 tablet sales projections from 172.4 million units to 190.9 million, and it projects annual growth of 16% per year through 2016, with sales in 2017 reaching 350 million units.

Android-based tablet market share will slip slightly over the next four years, from 48.8% in 2013 to 46% in 2016, while iOS will dip from 46% to 43.5% by 2017. Windows/Surface Pro and Windows RT tablets will account for 7.4% and 2.7%, respectively, by 2017.

Now, Microsoft is nothing if not patient and tenacious, but who would settle for 10% market share in four years? It's also worth noting that IDC believes it will be the more expensive Surface Pro, running x86-based Windows, that gains ground, and not RT.

"Consumers aren't buying Windows RT's value proposition, and long term we think Microsoft and its partners would be better served by focusing their attention on improving Windows 8. Such a focus could drive better share growth in the tablet category down the road," Tom Mainelli, research director for tablets at IDC, said in a statement.

Which shows it comes down to apps. Surface RT and Surface Pro operate the same, and RT is cheaper. But what good is it when the apps are MIA? That, however, is for another blog.

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