Microsoft: Surface sales more than doubled in last quarter

In July, Microsoft cut the price of its Surface RT tablet (now known just as Surface) by $150 in an attempt to boost sales. That plan seems to have worked as the company announced that for the third quarter of 2013 (July-September) sales of Surface tablets more than doubled compared to the second quarter of 2013.

Microsoft's chief financial officer Amy Hood made that statement as part of the company's quarterly financial conference call with analysts today. Microsoft had already announced that revenues from the Surface device family came in at $400 million for the quarter. That shows quite a large jump compared to the $853 million in revenue from the tablet's launch in late October 2012 to the end of June 2013.

Microsoft is still not stating just how many Surface tablets it sold during the third quarter; Hood did hint in the conference call that sales of the original Surface Pro in the last quarter were impacted due to customers waiting for Microsoft to launch the Surface Pro 2. On Wednesday, Microsoft cut the price of the original Surface Pro by another $100, bringing the price of the for the 64GB model down to $699.

Source: Microsoft | Image via Microsoft

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Toy sales always go up after price cuts. Nothing new here. Never stated are how many of those sales are consumer vs business/enterprise. (Maybe 98% vs 2%?)

People should take note they are quoting revenue numbers and not profit numbers. It would be interesting to know how much money, if anything, they've actually made off them

StandingInAlley said,
I'm hoping Nokia releases a cheaper tablet something like what 520 did for WP8 devices.

Well, if they do it'd probably be a mini tablet, 7-8" to fall in the $299-$399 price range. That's my guess.

Strange enough on front page excerpt it said:

sales of its Surface line of tablets more than doubled in the third quarter of 2013, compared to the previous quarter, most likely due to deep price cuts

but I can find the above line in this page (above) article.

Well, $350 is closer to what i think is appropriate for an ARM tablet. Going after iPad pricing without x86 compatibility was a mistake, IMO.

Chikairo said,
Well, $350 is closer to what i think is appropriate for an ARM tablet. Going after iPad pricing without x86 compatibility was a mistake, IMO.

agreed, MS were stupid to price a none x86 tablet against the x86 capable iPad..............OH WAIT!

duddit2 said,

agreed, MS were stupid to price a none x86 tablet against the x86 capable iPad..............OH WAIT!
Actually, there were Atom pads priced about that range. Also, they're the underdog in this situation, and since its a Windows tablet, that means there are expectations/baggage to go along with it. Like, well, running traditional Windows tablets.

iOS is a mature platform. WinRT/Metro is not. At $500, a Windows tablet *needs* x86 compatibility as a crutch IMO until WinRT/Metro is more developed. In a few years, I think having it be WinRT/Metro only won't be a big deal or problem, but that's then and only if they can keep improving the marketplace (which I expect them to).

Chikairo said,

iOS is a mature platform. WinRT/Metro is not. At $500, a Windows tablet *needs* x86 compatibility as a crutch IMO until WinRT/Metro is more developed. In a few years, I think having it be WinRT/Metro only won't be a big deal or problem, but that's then and only if they can keep improving the marketplace (which I expect them to).

Seen this argument so many times, it's still BS to me. Using Windows desktop apps on a 10" touchscreen sucks, simple-as. It's a nice convenience feature, but it doesn't contribute to the tablet-experience much at all. Calling it "Windows RT" is contentious, but Microsoft have gone to lengths to show of it's touch-focused UI.

Hurr hurr hurr 2 times 0 is still 0. /anti-ms-fanboy sense of "humor"

That's great news! It's going to pick up momentum. Soon.

The $350 price tag plus the start of school had a lot to do with it. College kids cleaned us out for the most part, especially the last two weeks of August.

siah1214 said,
That's great news! It's going to pick up momentum. Soon.

Its also reveals that original pricing is WRONG strategy by Microsoft Marketing Dept.

At consumer prices that would equal around 1.15 million sales, perhaps if you felt generous you could bump it up to about 2 million shipments at max if you account for a wholesale price of about 40% off what it retails for. Even with a price cut that's pretty weak sales (and that math was based off of a best case scenario: all sales of the lowest priced units, without any accessories)

But that's how the iPad and android started. You can't expect 11 million devices sold within a year and a half piloting a new OS AND a new concept.

ians18 said,
But that's how the iPad... started.

No it didn't. The first iPad's sales exceeded 3 million in less than 3 months.

ians18 said,
But that's how the iPad and android started. You can't expect 11 million devices sold within a year and a half piloting a new OS AND a new concept.

That's true, as a new brand and design plus a more premium price compared to volume plays like the Kindle the sales numbers are on the low side for now. Having said that though, the margins are where you make money, and even if they sell less than the competition, at these prices, they're bringing in good revenues. If sales manage to increase steadily we could hear about Surface hitting $1billion in revenues for a quarter. If/when that happens it's not something to really laugh at IMO. I doubt the plan for it was to take over the market, MS said they believe and want it to be a profit making business, so if it does that for them then it's fine in the end. Otherwise they'd be using the Amazon model and selling them for a huge loss from the start.

Manish said,

No it didn't. The first iPad's sales exceeded 3 million in less than 3 months.

You mean Q3? That was 2010. Now it is 2013, there is more competition.

ians18 said,

You mean Q3? That was 2010. Now it is 2013, there is more competition.

I know what year it is. Read what you wrote - "But that's how the iPad... started". The first iPad's sales in the first few months far exceed the numbers that Javik was estimating for Surface sales for the quarter. The point is the iPad was a runaway success from the get-go, whereas the Surface is simply not.

Manish said,

I know what year it is. Read what you wrote - "But that's how the iPad... started". The first iPad's sales in the first few months far exceed the numbers that Javik was estimating for Surface sales for the quarter. The point is the iPad was a runaway success from the get-go, whereas the Surface is simply not.

As I said there is simply more competition currently.

ians18 said,

As I said there is simply more competition currently.

Irrelevant. The market has shown that if a good competitor comes along it will do well, and while it hasn't sold as many as the iPad the Nexus 7 is a very popular device, and was from the get go. Microsoft's tablet strategy is proving that it really just isn't being well received by consumers.

Javik said,

Irrelevant. The market has shown that if a good competitor comes along it will do well, and while it hasn't sold as many as the iPad the Nexus 7 is a very popular device, and was from the get go. Microsoft's tablet strategy is proving that it really just isn't being well received by consumers.


The Nexus 7? Now that's irrelevant! Wrong Type of Device, Wrong Purpose. The Nexus 7 is pure consumption and it is 7 in. How do you know MS won't be the king of tablets in 5 or so years?