Dell: Surface market share will be less than 2 percent

Michael Dell on Tuesday commented on Microsoft's upcoming Surface tablet, a potential competitor to Dell's own hardware, predicting that sales of Surface would be "relatively small," reports CNET.

The comment came during Dell's second-quarter earnings conference call, where the company reported revenue of $14.48 billion, which is down 7.5 percent from Q2 2011, for a profit of $732 million, or 42 cents a share.

"I think there's an understanding of the number of units that they're likely to sell is a relatively small percentage. Maybe in the 1 to 2 percent range of total PC units during next year," Michael Dell responded to a question from an analyst.

Brian Gladden, Chief Financial Officer of Dell, also shared his thoughts on Surface. "[About] Microsoft entering the space -- we've spent time speaking to Microsoft and understanding how they're thinking about it," he said. "There clearly are opportunities for us as Windows 8 comes through and how we differentiate our products."

Depending on the success of Microsoft's new endeavor, Dell's words on Surface could someday be compared to his retrospectively regrettable comments on Apple, all the way back in 1997. When asked what he would do to fix the then-struggling Apple, he told a crowd of several thousand IT executives, "What would I do? I'd shut it down and give the money back to the shareholders."

Source: CNET

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Microsoft has stated how many units they plan on making, and that number is a fairly tiny percentage.

Anyone that can do math would have said the same thing and should have the same conclusion.

The only EXCEPTION or outlier that could happen is if OEMs don't provide competitive products or choose not to participate at all. (Which is what happened with the Zune and Xbox and why Microsoft took on the hardware full time.

How is one defining the "market" when marketshare percentages are tossed around? If one is referring to the casual mobile consumer user who likes the latest toys, Surface may gain a large (undefined) share. If one is referring to the intense business-oriented content-creating arena, Surface will be be negligible share.

Not surprising I mean the PC market is way different than mobile. You're going to have gobs of devices running W8. Surface could very well be a small % BUT if the price is right and the build is smashing then more people could turn to it.

Listen Michael, stop talking about Surface and start talking about what you are going to offer.

Yes I'm interested (a lot) in Surface Pro, but I also want to see what you'll offer.

Talk!

Which Surface is he talking about? Surface RT....he could be right. Although if the $199 price is correct, MS will sell every one that they can produce.

It's the Surface Pro that he should be worried about.

The problem is, no one else had announced a Windows 8 tablet that have as much fanfare as Surface. Apart from Lenovo, nobody else had caught my eye. I wager someone like Asus may had announce something or could make something that rivals it.

It may well be a small percentage in overall availability, but if the other OEM don't make a big fuss now, then the however million MS makes will essentially be however much they sell.

Of course, in the overall PC market they will be small. But it won't be smaller than any of your tablets, and indeed may cut deep into Ultrabooks.

superconductive said,
I wasn't aware Mr. Dell had a crystal ball...

He doesn't have one I'm sure, but that doesn't mean he isn't communicating with Microsoft. I'm sure MS is reassuring OEMs that they aren't doing this as direct competition and has committed behind closed doors to a market share target in that regard. They would be daft otherwise.

dagamer34 said,
Just so everyone knows, 350 million PCs are sold each year, so 1-2% is 3.5 to 7 million Surface tablets.

its about tablets, not PC's. MS already sells PC's.

PatrynXX said,
I'd expect Surface to do better than windows 8 RT....

???

You do know the Surface runs on Win RT, and Surface Pro runs Win 8 right?

If the price is not outrageous they will sell every one they can make.... the question is how many do they actually produce. Unless dell has some killer hardware the surface will still be the premium windows 8 experience.

Microsoft has said that they are introducing this to the market. It has not been designed, or planned to be the marketshare leader. I'm sure Microsoft would be happy with this, but when they said they are building and planning to sell "a few million," they are just trying to get the product out there and create a benchmark for their OEM's.

That is the plan, OEM's are king to Microsoft, they just want to make sure crappy tablets/laptops/surface devices are not made in masse.

ccoltmanm said,
Microsoft has said that they are introducing this to the market. It has not been designed, or planned to be the marketshare leader. I'm sure Microsoft would be happy with this, but when they said they are building and planning to sell "a few million," they are just trying to get the product out there and create a benchmark for their OEM's.

That is the plan, OEM's are king to Microsoft, they just want to make sure crappy tablets/laptops/surface devices are not made in masse.

Do you really expect them to say: we want to destroy OEMs?

ccoltmanm said,
Microsoft has said that they are introducing this to the market. It has not been designed, or planned to be the marketshare leader. I'm sure Microsoft would be happy with this, but when they said they are building and planning to sell "a few million," they are just trying to get the product out there and create a benchmark for their OEM's.

That is the plan, OEM's are king to Microsoft, they just want to make sure crappy tablets/laptops/surface devices are not made in masse.

So aim low and if you fail just say "we planned this all along"?

ccoltmanm said,
Microsoft has said that they are introducing this to the market. It has not been designed, or planned to be the marketshare leader. I'm sure Microsoft would be happy with this, but when they said they are building and planning to sell "a few million," they are just trying to get the product out there and create a benchmark for their OEM's.

That is the plan, OEM's are king to Microsoft, they just want to make sure crappy tablets/laptops/surface devices are not made in masse.

So aim low and if you fail just say "we planned this all along"?

Rudy said,
So aim low and if you fail just say "we planned this all along"?

You mean as in planning all along, starting back in the 1980s?

Are you new to computing or not able to notice the obvious?

ALL Microsoft hardware products are 'reference design' products to fill a void, set a standard, introduce new technology, or ensure competitive price points.

Seriously, do a bit of thinking, and look at every Microsoft product, there are outliers, but that was not their original intent, like the Xbox or Zune which Microsoft hoped partners would pick up.

Go back to the Microsoft Mouse, getting a mouse in Pc users hands by shipping with Word, later adding new technologies and a new protocol, adding additional commands like wheel to the PS/2 interface, new optical technologies, and on and on.

Notice the majority of Microsoft Mice today are all new 'reference design' models, not their traditional old mouse.

With the Surface, they are pushing quality with a new molded composite technology, responsive screens, etc. If left to prior attempts at low end Tablets, Microsoft does not want a repeat of the HP failed Tablet, or the low end Atom Netbook tablets with low end touch screens slapped on them. They also do not want OEMs sticking to the TabletPC ONLY class of digitizers that are VERY expensive. (Which is why TabletPCs were not consumer devices or competitive with the iPad that uses a very cheap touch technology for their screen in comparison.

Look at all the hardware, from Windows Sound System (driver standard pushing 16bit stereo audio a lot price point), Digital Sound System (moving past analog speaker technology) or more recent products like their entire line of HD Web Cams, because OEMS and Web Cams were still only 1-2mp and not 720 or 1080p while Microsoft had Messenger support HD video with virtually no webcams to use the technology.

And on and on...

So ya, they can 'fall back' on what they have been doing since early 80s with the Microsoft Mouse shipping with Microsoft Word so PCs would have Mice.