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Microsoft slashes orders for Surface RT tablets in 2012

Facing lackluster demand for its new Surface RT tablets, Microsoft has reportedly slashed 2012 orders from its Asian manufacturers from 4 million to 2 million units.

The reportedly sluggish start for Microsoft's first ARM-based tablet might prompt it to lower the price of the Intel-based Surface Pro due out in January, according to DigiTimes. Citing unnamed supply chain sources, the paper said Friday that Surface RT orders have been halved through the end of December.

"While we have nothing new to share regarding supply or sales at this time, this report is inconsistent with comments Steve Ballmer made several weeks ago regarding Microsoft ramping up supply and distribution for Surface with Windows RT," a Microsoft spokesperson said in a statement.

"As Steve mentioned, the reception to Surface has been 'fantastic,' which is why he also stated that 'soon, it will be available in more countries and in more stores.'"

The other makers of Windows RT-based tablets—Asus, Samsung, and Dell—are also experiencing "weak" consumer demand for those devices, according to DigiTimes.

The Taiwanese tech site said sources suggested that Microsoft might be considering bringing out its x86-based Surface Pro before the end of the year, instead of in January.

Redmond could also be contemplating a price reduction for the Surface Pro, according to the tech site. Microsoft announced this week that prices for the tablet would start at $899 for a 64GB version, with a 128GB model also available for $999.

That pricing structure has come under considerable fire from critics. The 64GB version of the Wi-Fi-only Surface Pro is currently priced at $200 more than Apple's fourth-generation Wi-Fi-only iPad with 64GB of onboard storage. The 4G-enabled version of the 64GB iPad, priced at $829, is $70 cheaper than the 64GB Surface Pro.

With Apple adding the iPad mini to its already potent iPad stable and Android-based slates beginning to make some real noise at the value end of the market, Microsoft is already facing an uphill battle in the consumer tablet arena. Pricing the Surface Pro higher than practically any other equivalent product out there was a puzzling move, according to Patrick Moorhead, principal analyst for Moor Insights & Strategy.

"Microsoft needs to be doing everything they can to project an image of success for Surface and Windows 8. The $899 starting price for Surface Pro will significantly limit penetration," Moorhead said.

"Microsoft needs a starting configuration at $699 to drive significant volume and then have a step-up configuration to $899," he added.

Redmond appears to be hoping that consumers will see enough difference between the capabilities of its Surface Pro products running a full PC operating system and other tablets running mobile operating systems so that direct price comparisons become less meaningful.

As per its national ad campaign featuring the Surface RT converting from a slate to a laptop configuration and back again, Microsoft is also pitching the tablet as a very different animal from products like the iPad in terms of how it can be used.

But the accessories required to make the tablet a hybrid computing device aren't all tossed in with the base Surface package. The Surface Pro comes with a Surface pen with Palm Block technology, but Microsoft's Touch Cover and Type Cover will cost consumers an additional $119.99 and $129.99, respectively.

Microsoft also has yet to establish that very many consumers want a full-blown PC experience on a tablet rather than a tool for basic media consumption, simple gaming, and the like.