IDC are saying that Microsoft is expected to build a little more than 3 million Surface tablets.

An IDC analyst also offered his views on the likelihood of a $199 version of the tablet.

IDC analyst Bob O’Donnell said in a phone interview. “Probably a little over 3 million, both [Intel] x86 and ARM,” he said. Surface RT is built around ARM processors and will not support older “legacy” software that runs on Windows 7. Intel-based Surface will run Windows 8 Pro that does run legacy software.

“If they build a few million units there’s no way they can sell it through Microsoft store only,” he said, referring to Microsoft’s current plan. “So I think that they’ll sell it through traditional retail also. You can’t build that many products without having a much wider distribution strategy. They just haven’t shared that [strategy] yet,” he said.

O’Donnell also had a lot to say about the possibility of an inexpensive Surface RT device, which a report claims may debut at $199.
“There could be two ways to get Surface. Buy it outright for, let’s say, $599. Or $199 for a two-year subscription and you can get X,Y, and Z — which, oh, by the way, works out to more than $599,” he said.

It’s going be an interesting ride with this pricing of the Surface.

I have said it over and over that I think that OEM’s are screwed. This just confirms this a little more.

Walk with me.

If Microsoft sell 3 million units of the Surface at an average of $400 (an average of all rumor prices $199 and $599), that’s 1.2 BILLION dollars.

By the way, that’s 1.2 BILLION dollars that Acer or HP or Lenovo or Samsung is NOT making.

Does anyone in their right mind expect a publicly traded juggernaut like Microsoft to stop selling the Surface in 2013 if the 2012 batch is successful?

If they start selling tablets successfully, then they will move to PC’s – no question in my mind. It would be irresponsible for a publicly traded company not to.

And once they are there, why not build a “reference” x86 tablet? And a Windows Phone 8 device (if Nokia isn’t working out).

If I was an OEM, I would be TERRIFIED and asking the question – “Does Microsoft really still need us?”

Interesting.

Source

About the Author

Onuora Amobi is the Founder and VP of Digital Marketing at Learn About The Web Inc. Onuora has more than a decade of information security, project management and management consulting experience. He has specialized in the management and deployment of large scale ERP client/server systems.

In addition to being a former Microsoft MVP and the founder and editor of EyeOnWindows.com, he is the CEO of a Pasadena based online marketing education startup - Learn About The Web Inc. (www.learnabouttheweb.com) and The Redmond Cloud (https://www.theredmondcloud.com).

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  • http://pulse.yahoo.com/_5WJGC7242GFDP2QXANKF5WTMEA Rex

    I appreciate your thinking on this, but I really, really, REALLY have to disagree.  You are thinking too much like Apple in my mind.  Is there any way that a single (or 2 if you add Apple) vendor can supply the complete world needs in computing?  Because that is what you are really talking about here.  The total potential is way more than 3 million units.  But to restrict themselves to this amount is pure silly.  They stand to make way more by having OEMs help with the initiative.  The only way that can happen is to work with OEMs not screw them.  The windows store is a huge potential to make them enormous amounts of money.  The more windows 8 machines the better.  Restricting the numbers by what they can make alone is pure idiotic.

    Look really, I think MS has figured out something.  The computer market is on the edge of a massive explosion.  When PCs came out, the home potential was one per household.  When laptop prices dropped it grew to one per adult.  Now with the tablet market, there is a glut of laptops that arent necessary (only one full computer is needed per household), but the tablet market has grown to almost one per person.  That is something on the lines of a billion tablets.  Now is 3 million really that much?

    So yes, watch out Apple, MS is about to blow past you in a major way.

    By the way, they have a reference x86 machine in the Surface Pro.

    • http://www.windows8update.com/ Onuora Amobi

      I have to respectfully disagree but time will tell.

      I have been wrong before.

      🙂

      • http://pulse.yahoo.com/_5WJGC7242GFDP2QXANKF5WTMEA Rex

        Dont forget, iDC is projecting a price of $599 for these machines (without subscription), where Lenovo will be selling theirs for $299.  If this is the case, I will buy a Lenovo and I am sure there are many more like me.

        I also think you are reading the 2 months into this, I dont think they plan to make 3 million before they go on sale. I think this 3 million is the projection of sales of these devices in total (over the next fiscal year).

        • http://www.windows8update.com/ Onuora Amobi

          The fiscal year thing is a great point (as opposed to the calendar year). It’s going to be fun to see how it all plays out. One thing for sure though. It’s going to be one bumpy ride.

  • Shahin

    3 Million ? screwed? come on .
    I don’t see 3 million a big number . we are talking about a vey big market (tens of millions) , and you think 3 million is too much? really?!!!
    taking all those BS from analysts and trolls , all those development costs , all  the risks for a 3 million market? do you think Microsoft and its OEMs are stupid? I’m honestly asking , really?!!
     
    just like you said , time will tell.

    • http://www.windows8update.com/ Onuora Amobi

      That would be 3 million units in 2 months if it was successful. Sounds like a big number to me…

      • CW

         3 mil/2 months = 18mil/yr. iPads are currently selling 17mil/yr and so it is only 1 mil more than iPad. Windows users are counted by billions worldwide and so it will take 100+ years to upgrade all windows users in the world with this speed.

  • http://twitter.com/RobbieGoD316 Robert Fletcher

    Sure OEMs are screwed if they sit by and watch Microsoft out innovate everyone around them. If OEMs keep building the same giant laptop form factors, then YES they are going to be in trouble. This is a wake up call to all OEMs. Wake up! Get to work! Because you have not been able to deliver a decent tablet and you let Apple gain practically full control of the market space, its not time to get it in gear. Microsoft just spanked all OEMs. If you can’t hear, you can feel.

    I was just in Best Buy yesterday looking at the Surface Pro. I looked at all of other laptops. These things are just huge, bulky and heavy. I looked at the Surface Pro and yeah its a little thicker then the RT, but i think this is ok because compared to all of the other laptops out there, they all suck for the most part. There are a few that are great. Lenova Yoga for one. Nice thin and flexible tablet laptop.

    Looking at some of the DELLs, ASUS, ACER, and Samsung – all of the laptops that are not ultrabooks are like these 4 inch laptops that when you close them down, its just crazy. If you go into best buy, you will see what i mean.

    Microsoft is probably just tired of looking like we are behind the curve. Microsoft Surface Pro has taken them a step ahead of the curve doing something that no other company has done. They’ve made a tablet running a full Operating System giving new meaning to what a tablet can do.

    But still, let’s come back to earth. Is the surface pro, perfect, no. It has some limitations. Battery life is not as good as i would want. I’d like more hard drive space, like a 256GB model, but the fact is that not many laptops have SSD of that size. SSD are still kinda small compared to your normal hard drives. The screen is great. The touch cover is great. The pen is great. The speed and performance of the Surface Pro felt really good.