Despite of the initial state of Microsoft Surface with some questions about the performance and smoothness of the experience [‘Experiencing the Cloud’, Nov 12 – 28, 2012] Forbes says that Microsoft Surface Outsells The Nexus 10 And Points To Redmond’s Post-PC Future [April 20, 2013]:
Nexus 10 numbers are from Evans, who takes the relatively unique screen size of the Nexus 10 tablet, identified as ‘xlarge XHDPI’ in the development data that Google provides. Take these numbers, exclude China, and apply it equally to the Google Play user base (which Google now use for all their Android usage numbers) and Evans comes out with an initial figure, albeit with caveats, of 680,000 Nexus 10 tablets in use.
Microsoft Surface slaes numbers are also hard to come by, but Bloomberg’s call of 1.5 million Surface RT and Surface Pro devices is in line with many analysts, so let’s run with that number. Even allowing for some give and take in the calculations, Microsoft’s Surface is doing better than the Nexus 10.
Certainly Surface as a brand is nowhere close to the sales of the iPad (over 23 million units sold). But if you take the Surface Pro (which Bloomberg reckons makes up around 400,000 of those sold units, and that’s with just one month of availability in the quarter), and give Microsoft a healthy margin on the unit of around $500 on the Pro, that gives Redmond’s Surface division a potential revenue of $200 million.
Yes the volumes are low, and the Surface range is not as attractive as the iOS choices available. But if Microsoft can build up the sales of the Surface Pro in 2013 and reach four to five million unit sales a year, they will have a healthy income stream from their Surface range. Much like sales estimates, there is conjecture and assumption in making a jump from 400,000 sales in one month and extrapolating a similar sales level throughout the whole year, but it’s not an impossible jump to make. It’s certainly within Redmond’s reach.
For Google, the Nexus 10 is almost a technology demonstrator. But Microsoft’s Surface is a key part of the companies future, and sales of the hardware are a key part of their strategy. The advantage to out-selling the Nexus 10 is that Microsoft are reaching more than the developers, hackers, and geekerati that the Nexus 10 reaches… but they need to keep reaching out and selling to create a place in the new mobile computing era.
The chain which lead to the above mentioned “680,000 Nexus 10 tablets” estimation is:
– Nexus tablet sales: not many [Benedict Evans, April 17, 2013]
– Nexus 7 maths [Benedict Evans, Feb 19, 2013 with update on March 6, 2013]
– Issue 2: Condé Nast, Nexus 7 sales, Chinese Android, Lonely Planet, Tumblr, Verizon & Vodafone [Benedict Evans, March 10, 2013]
Given that now we know from Microsoft: With cloud services investments starting to pay off Windows 8 and Windows Blue will bring more competitive devices particularly in new smaller form factors targeting the tablet market [‘Experiencing the Cloud’, April 19, 2013]
… we are expanding both the product set and distribution, and that is broadly, all devices, inclusive of Surface. We are expanding distribution of Surface. We are now in 22 countries, 70 retailers. And we’ll continue to look to expand that. Not only just expanding, but improving the experience. And that’s true not just for Surface, but for broadly Windows 8 devices. And sowe’ll be investing against that for both Surface and a broader array of Windows 8 devices at multiple price points, including lower price pointsgoing forward.
Over the last couple of months, we’ve started seeing devices that take full advantage of Windows 8, and we expect to see more devices across more attractive price points over the coming months. As part of this, we are also working closely with OEMs on a new suite of small touch devices powered by Windows. These devices will have competitive price points, partly enabled by our latest OEM offerings designed specifically for these smaller devices, and will be available in the coming months.
so, given that we may predict that there could be as much as up to 10 million of these new small touch Surface devices sold in H2 2013 (as according to Nexus tablet sales: not many [Benedict Evans, April 17, 2013] there were “5.35m [Nexus 7 tablets sold] in the second half of 2012”).