Analyst: Microsoft Surface is the new Zune

With Windows 8 now complete and sent to the manufacturers that will build the devices that run the new OS, the waiting game begins between now and its official public launch on October 26. On the same day, Microsoft will also launch its stylish new Surface tablets, which the company announced in June.

Microsoft’s decision to build its own tablet has proved to be a contentious issue, with even Microsoft itself acknowledging that its “Surface devices will compete with products made by our OEM partners, which may affect their commitment to our platform”. There’s clearly some risk here, but Microsoft evidently believes that it’s worth the effort; CEO Steve Ballmer has said he expects the company to sell “a few million” of the new tablets.

But Tim Coulling, from leading technology market analysts Canalys, doesn’t think that Microsoft’s efforts will pay off. “The information available to date suggests the prices of both [the Windows RT Surface and Windows 8 Surface Pro tablets] will be too high to capture significant market share, and a direct sales approach will prove inadequate,” he explained, a reference to Microsoft’s plans to only sell the devices via its website and physical Microsoft Stores.

Worse still, Canalys believes that Surface will “have a similar impact on the PC industry as Zune did in portable music players”; despite being on sale for years, Microsoft’s Zune music players failed to sell in any great volumes, while Apple’s iPod went on to claim much of the market.

As Information Week reports, Canalys also believes that Windows 8/RT tablets from other manufacturers will struggle to compete effectively. Canalys adds that it has recommended to Microsoft’s hardware partners that they “postpone launches of Windows RT pads until Microsoft rethinks the high license fee," according to Canalys’ Chris Jones. Microsoft is believed to be working closely with only a handful of OEMs on Windows RT tablets - which will precede the arrival of full Windows 8 tablets by around three months - so it's unlikely that Canalys' recommendations will have much influence on device manufacturers anyway.

Without being privy to Microsoft’s strategy for Surface, it’s difficult to know exactly what would count as a success for its tablets though, and a recent post on The Official Microsoft Blog by the company’s Frank Shaw offers little clarity. In it, he refers to Surface as “our new family of PCs built to be the ultimate stage for Windows”.

Does this mean that Surface is little more than a product showcase, a reference design to show off the potential of the platform? Or does this hint at even more Microsoft-branded devices on the way, a sign that perhaps Microsoft is serious about making a dent in the consumer hardware market? Let us know your thoughts in the comments below.


Via: WinSource
Source: Information Week | Lower image via Microsoft News Center

Report a problem with article
Previous Story

Samsung confirms Aug 29 reveal for new Galaxy Note

Next Story

Leaked Windows 8 Enterprise N video walkthrough

79 Comments

Commenting is disabled on this article.

Everything will depend on the price and international availability. If it's true that MS is only going to sell surfaces on Microsoft Stores and online MS Stores then that means US only - fail.

Does anyone really think version 1 of a Microsoft OS running on Version 1 of MS hardware will do any good in a market already saturated with competing products? This really is the Zune all over again. It may even be the next Kin.

Well it does have those Pink and Orange Zune colours going on...that must be it!

It'll fail if it's too expensive.

I think pricing is very important. If it would be really expensive, it could lead to a massive failure but if it would be at reasonable price It could be a lot of success. I think Surface RT should be arount 400$ for base model. It might be under priced but It will work Just like the way they underpriced XBOX 360 at start and when they dominated market raised the price.

I hope the prices are good because if they are too high then it won't sell. It has to be cheaper then an ipad or macbook pro in order to compete well. Also I don't want to have to lact8 for win8.... LOL.

Deihmos said,
I tend to agree. The surface will be a flog and Windows 8 tablets will struggle against the iPad.

near term, possibly. Long term, MS can kill Apple's profit margins and make more money off software

I don't think this is true. There are lots of PC laptops that out number iPad and people have not stopped buying them. Now they have an alternative. Instead of buying a PC laptop they can buy a PC surface and still have the full functionality of a PC. There is nothing to be proven here. The numbers exist. At the same time Apple is only gaining very little iPad users. So I don't think Microsoft has to prove nothing. They will sell the Surface easy. Apple does not have anything to worry about. They have no new users, but they will maintain there existing user base. The only one that has a lot to loose are PC notebook manufacturers but they can always switch to selling the surface.

The price for the SurfaceRT needs to be in line with the iPad. The Surface (intel) can be plenty higher because its an actual useful computer.

I'll gladly spend 1k or more for an intel surface once I hear a good review. RT Device? I'm pre-ordering unless its more than $100 over the ipad price.

People seem to be genuinely interested in these devices. The only stumbling block could be the price, and that has yet to be announced.

The iPod had ALREADY claimed that market. It's not as if they launched at the same time.

It's troublesome enough to enter a market against a popular, entrenched competitor, but when it's accompanied by something like iTunes, so that all your stuff is already within one ecosystem, the situation is much worse.

The only detail I agree with is pricing. Surfaces must, must, must be reasonably price-competitive with iPads, no matter the relative functionality.

At least he didn't say it will be the new Kin. By the way I wonder what Tim Coulling the analyst said about Zune when Zune came out. Oh he's a UK analyst who went to Oxford Brookes University, is that a good school?

It will become the new Zune!

But only if Microsoft doesn't launch it internationally and stops investing in it like it did for Zune.

The Zune player (mostly the HD) was a superior device paired with a superior software experience. But unfortunate and visionless strategy at Microsoft did everything that was possible to slowly kill the product by attrition.

Wisely priced, properly marketed and sufficiently supported, Surface tablets will be successful.

TheCyberKnight said,
It will become the new Zune!

But only if Microsoft doesn't launch it internationally and stops investing in it like it did for Zune.

The Zune player (mostly the HD) was a superior device paired with a superior software experience. But unfortunate and visionless strategy at Microsoft did everything that was possible to slowly kill the product by attrition.

Wisely priced, properly marketed and sufficiently supported, Surface tablets will be successful.

but it is already not like Zune at all. You couldn't get zunes built by OEMs, unlike with windows 8 tablets which anybody can make. so it is not possible to compare this to zune in any way.

But they don't want Surface to sell millions of volumes. They want to show the OEMs what a nice Windows 8 should actually look like.

Some of these anlysts are paid by their competitors to generate bad feed backs. I bet thats what its going on. All these analysts are bunch of tools.. the real analysts are the common people that buys these products and give their real life experiences on these products.

Not sure where he is coming from. If MS markets it well, prices it competetively and all of that then it will do fine. It isn't zune because a) it does more than play mp3 and b) it runs a full featured robut OS. I don't even know how this guy can compare to Zune but oh well.

Now, with that said, even if Surface doesn't sell well you can't discount the dozens upon dozens of other machines that will be running Win8. MS is software FIRST and hardware second.

TLDR; guy is a moron.

laserfloyd said,
Not sure where he is coming from. If MS markets it well, prices it competetively and all of that then it will do fine. It isn't zune because a) it does more than play mp3 and b) it runs a full featured robut OS. I don't even know how this guy can compare to Zune but oh well.

Now, with that said, even if Surface doesn't sell well you can't discount the dozens upon dozens of other machines that will be running Win8. MS is software FIRST and hardware second.

TLDR; guy is a moron.

it's just another analyst like the ones that said Android would never take down the iOS empire.

If Zune was a Plays For Sure device and all Plays For Sure devices connected by default to the Zune Marketplace for music then the comparison would be apt. Surface is different from Zune, Kin, and Xbox because it is just one device in a larger ecosystem, not a proprietary device. Surface doesn't need to sell iPad numbers to be a success.

Are most analysts working out of their mom's basement anyway. The only thing that stops me from buying MS surface is if Nokia also sells Surface tablet.

Surface is a tablet that runs windows, there are going to be alot of tablets that run windows. What is fail supposed to mean here? Tablets that run Win8? The Surface product itself? Win8?

It does not seem like MS expects Surface to sell a billion units, it is a device they put out to make OEM's step up their game and try and match them with great and innovative hardware.

So is Surface a failure if it by itself does not sell Ipad numbers but Win8 tablets sell alot and Win8 sells a ton?

I think these analyst simply do not understand what is going on here.

Surface is not a proprietary product that no other HW makers are going to make. Surface is simply 2 models of a Win8 Tablet that will be on the market along with dozens of other Win8 tablets.

Zune was a closed proprietary music device made by one company, Surface is a personal computer. The comparison is completely silly.

swanlee said,
Surface is a tablet that runs windows, there are going to be alot of tablets that run windows. What is fail supposed to mean here? Tablets that run Win8? The Surface product itself? Win8?

It does not seem like MS expects Surface to sell a billion units, it is a device they put out to make OEM's step up their game and try and match them with great and innovative hardware.

So is Surface a failure if it by itself does not sell Ipad numbers but Win8 tablets sell alot and Win8 sells a ton?

I think these analyst simply do not understand what is going on here.

Surface is not a proprietary product that no other HW makers are going to make. Surface is simply 2 models of a Win8 Tablet that will be on the market along with dozens of other Win8 tablets.

Zune was a closed proprietary music device made by one company, Surface is a personal computer. The comparison is completely silly.

Kept scrolling down to see if anyone would bring out these obvious points. Good form!

It depends on whether Microsoft is going to sell it outside of the US. The Zune was never given a chance to succeed because it wasn't available in Europe and if Microsoft does the same with the Surface then it will struggle, as the market is saturated with competitors.

If you're late to the market you need to be revolutionary to succeed while at the same time have a price that matches the functionality (eg. the iPhone). And if the Surface RT is like Windows Phone with not so many good apps on the marketplace and lack real multitasking / background-apps it really isn't worth buying.

Alex Posey said,
If you're late to the market you need to be revolutionary to succeed while at the same time have a price that matches the functionality (eg. the iPhone). And if the Surface RT is like Windows Phone with not so many good apps on the marketplace and lack real multitasking / background-apps it really isn't worth buying.

You realize the Surface is windows8 with touch input right...aka a full blow Operating System..you know like Windows 7, XP and OSX. Now since that is the case what makes you think it won't have many applications/real multitasking and background apps? Since well as we all know that already exists in the above mentioned OS's? (That is accounting for applications that will need to be retrofitted for Metro to run on RTM - which I bet all the important ones will sooner or later)

The amount of misinformation around the internet is outstanding.

Alex Posey said,
If you're late to the market you need to be revolutionary to succeed while at the same time have a price that matches the functionality (eg. the iPhone). And if the Surface RT is like Windows Phone with not so many good apps on the marketplace and lack real multitasking / background-apps it really isn't worth buying.

let's be clear that iOS lacks multi tasking. you know what else iOS lacks, multi-user. All these features are basic NT features which are baked in windows 8. so technologically speaking, windows 8 is years ahead of iOS because it is a true multi-user multi-tasking multi-purpose kernel and OS.

the surface (either one) has one great advantage over just about every other and especially the ipad, a USB port. it gives one the capability to use it in considerably more ways without tying it to "propriatary/closed services".

It wouldn't surprise me if it failed. The issue isn't anything to do with the quality of the product or software, but that it is simply way too late to the market and not revolutionary enough. If you are going to be 5 years late to the party you need to be doing something quite extraordinary, otherwise people will stick with what they know.

Microsoft seem to be responding to potential "threats" now and not actually innovating in areas they understand well. It irritates me because the things they are good at are being jeopardised or compromised on for fads.

I doubt it. Over 80% of computer users use Windows and this is a product that runs Windows. Zune devices didn't run an operating system that is branded/marketed as Windows.

For the first time i agree with them... Microsoft doesn't have the same "appeal" as Apple or Google (and most of the time even if they do something sh***y, customers don't care).

Nothing special + MS customers "appeal" = dead thing walking

fenderMarky said,
For the first time i agree with them... Microsoft doesn't have the same "appeal" as Apple or Google (and most of the time even if they do something sh***y, customers don't care).

Nothing special + MS customers "appeal" = dead thing walking


out of curiosity, how would you define that "appeal?" if microsoft didn't have much appeal, they wouldn't have the over 80% percent os, xbox 360s wouldn't have taken such a huge place in the video game industry and among customers, and their office products would have died off already.

aviator189 said,

out of curiosity, how would you define that "appeal?" if microsoft didn't have much appeal, they wouldn't have the over 80% percent os, xbox 360s wouldn't have taken such a huge place in the video game industry and among customers, and their office products would have died off already.

Well they may have gotten lucky with the Xbox 360, but otherwise the only reason why Office and Windows even IE are a success is because they are used everywhere. Most businesses and schools use it because its become the mainstream OS. Mac OS is too expensive and half of the population doesn't know what Linux is or just wants something that's ready, cheap and that everyone else is using. I have to fight you on the fact that Microsoft has become the "uncool" company,

Thinking about it mostly only the products that were launched 1990's to early 2000's have been the successful ones. Zune, Bing, Kin have followed another path. This is just one opinion here but I think that Microsoft is just coasting or rather feeding off of the major success it experienced earlier on with its more successful products. Some products they are able to maintain effectively such as Office others such as Internet Explorer not so much. Windows 8, well we will just have to see when it hits the market. They need to build that appeal that they had in the 1990's if they want their products to be successful. I think that the Microsoft Surface looks to be a very interesting product, but they need to build appeal with their audience, their customers. Otherwise they aren't going to get a chance with any of their new products; actually good (Zune HD) or not so good (KIN).

Look at Apple, most of their products have been major success. Their brand equity is probably one of the most valuable assets to the company. Frankly you know a company has lost its appeal and is aware of it when they release a commercial like this: The Browser you Love to Hate

http://www.youtube.com/watch?v=4DbgiOCTQts

They need to fix the mistakes they made and blow the public away with a product that states that they can innovate if they wish to reacquire their customer appeal.

ahhell said,
The 90s are calling. They want their "not" back.

I wish the '90s would give him the gift of capitalization, so that he may communicate properly.

Mediocre hardware, no mobile connection, poor display, poor functionality and with $1000 for RT version. It's going to be one of most expensive ARM tablets to date. 32GB iPad New with mobile connection is even cheaper.

So yes, it is a fail.

coth said,
Mediocre hardware, no mobile connection, poor display, poor functionality and with $1000 for RT version. It's going to be one of most expensive ARM tablets to date. 32GB iPad New with mobile connection is even cheaper.

So yes, it is a fail.

I want some of whatever you are smoking

coth said,
Mediocre hardware, no mobile connection, poor display, poor functionality and with $1000 for RT version. It's going to be one of most expensive ARM tablets to date. 32GB iPad New with mobile connection is even cheaper.

So yes, it is a fail.

Who told you it'd be priced at $1000? If you're referring to the webhallen.se pricing that was "revealed" a couple of weeks ago, it was confirmed to be a retailer dipping its toes in the water to gauge interest. Not by any means an official price.

And oh - it also included the more-than-twenty-percent sales-tax of Sweden.

coth said,
Mediocre hardware, no mobile connection, poor display, poor functionality and with $1000 for RT version. It's going to be one of most expensive ARM tablets to date. 32GB iPad New with mobile connection is even cheaper.

So yes, it is a fail.

For that price we'll likely see a 64GBSSD, 4GB RAM, 10" 1080p fulltouch screen with separate layer for pen, i5/Ivy bridge device with displayport and USB3.. Yeah real shoddy specs..

This firm has not thought of all the other hardware that MS make currently like keyboards and mice and webcam's, etc. I feel that this firm does not really know what it is doing.
And how come I have only heard of them today ????
Anyway these Analyst firms are always coming out with this sort of doom and gloom, remember when they said that Windows Phone wouldn't really sell, you don't see them now saying "sorry, we got it wrong !" Oh no that would be too much to ask for wouldn't it ??

You are right, Windows Phone has been a HUGE success and the analyst who said it would not be a success was very wrong.

Once again he neglects to mention that the Zune was hamstrung by being US only. Who knows how it would've gone had they released it in other markets. Some countries may have bought them more than the alternative if they were available.

What choice do you have these days? It's an ipod or a...phone of some sorts.

If they sell the Surface from their website, and ship it worldwide, they're already going to be more successful than their Zune, which was made very difficult to get from outside the US. If they continue the "US is the only country on the planet" approach to selling things, then yes it will fail, and it'll be a bloody shame too, because their Zune was awesome, with the only handicap being it was bloody difficult to get from outside of the US.

I guess you think Canada is another American state ???
Americans lol

oh and i guess someone couldn't just order one from newegg or tiger direct then right ?

I am Not PCyr said,
oh and i guess someone couldn't just order one from newegg or tiger direct then right ?

Yeah right. Factor in the shipping cost, and it becomes even more expensive for anyone outside North America. Plus the Zune pass (the main differentiating factor with the Zune compared to the iPod IMO) was US-only - if you want to use it outside the US, you need a US credit card (+ a VPN perhaps?). And with most electronics without international warranty, if it fails, you have to ship it all the way back to the US for warranty claims, incurring even more cost (and risk).

Thus few people will want to order in this way. It's evident that even though it is possible to buy electronics online, it is still quite limited due to the warranty and shipping issues. Otherwise, manufacturers will not be able to sell the same item at a different price (even after conversion to US$) in different countries.

It is all about convenience. In my country, when the initial iPhone was US-only, of all my friends only one of them imported it from the US through a relative and then jailbroke it to use with the local carrier. After the iPhone was officially released on one of the carriers, sales increased rapidly, and now that it's on all the carriers, you see at least 1 in 4 phones being an iPhone. My point is that even though one can import, it is inconvenient and discourages purchases significantly. Any barriers (like warranty and carrier limitations) will slow adoption of a new product.

I am Not PCyr said,
I guess you think Canada is another American state ???
Americans lol

IdeasMan is an Australian- not an american. Don't be a ****.

When are the analysts ever right? Rarely if ever. I think Microsoft doesn't care if this thing captures the market, but they are using to specifically challenge the OEMs to create better windows 8 tablet devices. I don't know if anybody remembers, but Microsoft priced the Zunes several US dollars less than their iPod equivalents. The reason that the Zunes didn't sell well is that Microsoft waited too long to create their music player; most people had an iPod by the time the brown brick came out. It's too sad Microsoft didn't try harder at marketing the devices, because they were several times better than the iPod was. ALL Zunes had an internal FM radio, cost at least a dollar less than their iPod equivalent, could share music via ad hoc, and the second and third generation devices and the Zune HD could all access the marketplace from a wifi hotspot. But sadly Microsoft only half assed the marketing plan and didn't really care about the Zune devices. That and zero media attention and almost no one knew about the product. I don't think Microsoft will price these devices more than 499.99 USD for the RT, and the i5 version more than 999.99USD. Microsoft wants to breed competition. The best way to do that is by being competitive yourself.

Microsofts's image to consumers is that they are old and out of touch and the only way the Surface is going to get any traction at all is if it sells for bargain basement prices. If its priced equal to or more than the iPad and top end Android devices the surface will fade into obscurity a lot faster than Zune did.

At the end of the day the Surface RT is so much more than an Ipad so stop trying to be an Analyst most are dumb as **** anyways.

True, if Surface comes in at an equal price you get way more bang for your buck and a much better ecosystem to support it. Besides app store iPad has no ecosystem to speak off and does not even run a full fledged OS, it's more like a souped up media player with apps (iPod anyone?)

nickcruz said,
stop trying to be an Analyst most are dumb as **** anyways.

Its called an opinion...do you always cry when someone leaves an opinion you do not agree with?

nickcruz said,
At the end of the day the Surface RT is so much more than an Ipad so stop trying to be an Analyst most are dumb as **** anyways.

In the end it really isn't.

the striking issue is price , if price is fair and reasonable the sell of Surface is unbelievable. Therefore, I believe Microsoft lean a big lesson from Zune fail and I think Microsoft is not crazy to sell Surface with high price when they can see a wide range of competitor in market like Google with their 200$- tablet.

Mahdi Negahi said,
the striking issue is price , if price is fair and reasonable the sell of Surface is unbelievable. Therefore, I believe Microsoft lean a big lesson from Zune fail and I think Microsoft is not crazy to sell Surface with high price when they can see a wide range of competitor in market like Google with their 200$- tablet.

These tablets will likely be priced higher, so it will be important for Microsoft to show and explain (via marketing) that the Pro line are both a tablet (like the iPad) AND a full PC that you can plug in to a monitor, keyboard, and mouse.

nickcruz said,
Zune only failed because of bad marketing, the device was better than an Ipod with the exception of lack of apps.

Sounds like a pretty huge exception to me. The ability to add a number of new features to your device sounds like one of the most important things and Zune's inability to do that where the iPod touch did could definitely have doomed it from the start.

Bla, bla, bla, bla, bla, ... I wonder if any of these analysts are rich? No? Thought so. Why don't they just shut the **** up?

Edited by Eric, Aug 3 2012, 11:25am :

Drossel said,
Bla, bla, bla, bla, bla, ... I wonder if any of these analysts are rich? No? Thought so. Why don't they just shut the **** up?

Well said, these guys are too disappointed with there own career so they try to bring down high profile companies.

Edited by Eric, Aug 3 2012, 11:39am :

Drossel said,
Bla, bla, bla, bla, bla, ... I wonder if any of these analysts are rich? No? Thought so. Why don't they just shut the **** up?

I usually read any prediction by an "analyst" and then disregard it as pretty poor guess work.

Edited by Eric, Aug 3 2012, 11:52am :

Drossel said,
Bla, bla, bla, bla, bla, ... I wonder if any of these analysts are rich? No? Thought so. Why don't they just shut the **** up?
These analysts are probably the same idiots who flood YouTube with those 'Illuminati will bomb London 2012 games' rubbish in their spare time..

I don't think so, MS will do way more to push the surface because it helps push Windows RT and Windows 8 by extension. Also, the few million comment from Ballmer was probably said specifically not to rub off on OEMs. What would it sound like if he said "we're planning to sell 10 million by the end of the year." or something? MS has to walk a fine line with this but in the end the OEMs are going to do fine, there are some very nice alternatives to the surface on the way from them to.

I just don't see the similarities with the Zune where MS was on it's own, sure the Surface is made by them but at the end of the day it's just a pair of devices in a large Windows RT/ Windows 8 group. They really don't have to sell the most for this to be a success.

I don't see similarities with Zune either. By the time MS got it right, Zune HD, smartphones basically made standalone pmps obsolete. About the only think that will kill surface is if the price is too high, and if there are no great Metro Apps, relatively quickly.

For someone like me who can't stand any laptop or ultrabook, its just such a chore to lug around, I'm getting a Pro period. I love what I see and the form factor is what I want.

ultimatescar said,
I hope it wont die like Zune

Why? So other companys like Apple can stop innovating and churning out the same **** every few months?? Even if you don't want one or are completely uninterested, competition is good because in the end its the consumer that wins.

Edited by Eric, Aug 3 2012, 11:51am :

ingramator said,

Why? So other companys like Apple can stop innovating and churning out the same **** every few months?? Even if you don't want one or are completely uninterested, competition is good because in the end its the consumer that wins.

Yes, that's why he said he hopes it will NOT die like Zune.

Edited by Eric, Aug 3 2012, 11:03am :

ingramator said,
Why? So other companys like Apple can stop innovating and churning out the same **** every few months?? Even if you don't want one or are completely uninterested, competition is good because in the end its the consumer that wins.

Read properly before posting a rant next time.

and a direct sales approach will prove inadequate,” he explained, a reference to Microsoft's plans to only sell the devices via its website and physical Microsoft Stores.


that's the only thing I agree with. When will Microsoft learn to do a full world wide release (where the product has the same or at least as much of the same functionality in every country) carried by big resalers.

XerXis said,
and a direct sales approach will prove inadequate,” he explained, a reference to Microsoft's plans to only sell the devices via its website and physical Microsoft Stores.

That has more to do with OEMs and not stepping all over them. I fully expect we'll see a broader rollout of the surface devices a quarter later. They're doing this to give the OEMs a head start while at the same time showing them what the type of device for Windows RT/ Windows 8 should be like. If anything the Surface is the bar being set while giving the OEMs the chance to go first, specifically on the x86 side.


that's the only thing I agree with. When will Microsoft learn to do a full world wide release (where the product has the same or at least as much of the same functionality in every country) carried by big resalers.