Microsoft Surface RT Needs Larger Retail Presence to Succeed, Says Analysts

We keep hearing relatively negative analyst “reports” that the Microsoft Surface RT is either a total disappoint because of its UI or is simply overpriced. Today isn’t any different, now Detwiler Fenton chimes in stating that Microsoft is killing the Surface due to its distribution model.

Refreshingly, the analysts at Detwiler Fenton aren’t necessarily stating that the Surface is a total disappoint. The firm points to strong marketing of a solid looking product.

Their concerns are that it might do better at a more competitive price since it is a new item with a new ecosystem, and they also believe it needs a much wider level of retail exposure.

For the first time in a long time, I find myself somewhat agreeing with analysts. Okay, so no I don’t think the Surface RT is overpriced. That said, I DO think Microsoft should have charged around $50-$100 less to give them an extra edge.

The $499 asking price isn’t too much for the hardware or the software with the Surface RT, but it is an unproven product. Selling a little lower can go a long way to win over new fans and solidify their position as new third contender in the tablet wars.

As for their limited retail arrangement? I completely agree here, and have from the beginning. Not everyone likes to shop for new technology online before they can try it directly. Not everyone has a Microsoft store within easy travel distance either. Having chains like Best Buy ready to go with the Microsoft Surface RT would have went a long way to helping give Microsoft better exposure.

Right now, a potential customer sees a commercial or even a bulletin board for the Surface and think, “Hey that look’s pretty darn slick”. This makes them want to give it a try— only problem, they don’t have a way to try before they buy, so what do they do? They very likely buy an iPad or Android tablet instead.

The good news? This will all pass. I am confident that Microsoft will start working to broaden its retail presence in 2013. As this happens, it will start to take off at much higher levels than it currently is.

As for the pricing? I don’t expect Microsoft to change this tactic soon, but as the amount of apps grow, more customers will probably be just fine paying $499.

Long-term, the Microsoft Surface RT and PRO will be successes, at least in my opinion. For now Microsoft is taking the modest approach, at that’s perfectly fine. It gets their name out there and gives them a good start.

What do you think of the Microsoft Surface RT so far? Does it need a larger retail presence in order to win over more customers?

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  • DCJason

    I’m wondering if this is all part of a ‘deal’ that Microsoft
    had to make with their OEMs. First, Microsoft must have agreed not launch the Surface
    Pro until 90 days after the OEMs would launch their Windows 8 laptops. This
    will give the OEMs a head-start on Windows 8 laptop sales. Maybe limiting the
    sales of the Surface (and Surface Pro) to only online or the Microsoft stores
    for a agreed amount of time before selling them at Best Buy, etc is part of the
    ‘deal’ (since most of the OEMs already sell their products at Best Buy, etc).
    These could be concessions that Microsoft gave the OEMs since Microsoft is
    selling hardware for the first time that is directly competing with the OEMs.
    When one thinks of the billions of dollars that Microsoft is spending on
    advertising the Surface, really, why would they limit customers to purchase
    their product? There must be a bigger plan that we don’t know about as the
    reason they are doing it this way. Their marketing people are VERY smart and
    although they may have their hands tied to the OEMs, Microsoft wants to keep
    these companies on their good side since Microsoft is encroaching on
    their hardware market (I’m sure many of the OEMs were NOT happy when they were
    told about the Surface). In the long haul of the life of a laptop and Windows 8,
    a 3-6 month delay is something Microsoft just has to live with to keep their
    partners happy. The question is can we?

    • Andrew_Grush

      Great point DC Jason… I was honestly thinking around the same lines. It is very possible they kept things limited to ease their vendors into their presence in PC hardware. Thanks for commenting! 🙂

  • John

    People compare the Surface RT’s price to the BOM and the performance to an ultrabook.