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Windows tablets capture more share, but Surface suffers

Gregg Keizer | Aug. 6, 2013
Microsoft shipped just 300K Surface tablets in Q2, just 15% of all Windows tablets, says IDC.

Windows' share of the tablet market grew slightly in the second quarter, as shipments also ticked up in the face of a slow-down by tablets overall, researcher IDC said today.

But the Redmond, Wash. company's innovative Surface line contributed just a fraction of that tally, showing just how difficult a task Microsoft has set for itself in transforming into a device builder and seller.

"The [OEM] partners who have been supporting Windows 8 continue to do so, which is good, and they're starting to make some traction," said Ryan Reith, an IDC analyst on the team that tracks tablet shipments. "But I would not call Surface a success by any means."

While all tablet shipments declined about 8% in the second quarter compared to the first, those powered by Windows grew by 11% over the same stretch, according to IDC estimates released Monday.

Shipments of Windows tablets -- primarily Windows 8 but also a smattering of Windows RT -- climbed from 1.8 million in the first quarter to 2 million in the second. That brought Windows tablets' share of the global market up to 4.5% from the 3.7% of the first quarter.

The big winners in the Windows tablet space were largely the OEMs, or "original equipment manufacturers," familiar to PC buyers, said Reith: Acer, Asus, Hewlett-Packard, Lenovo and Samsung. "HP had a good quarter with [Windows] tablets," he said. "Dell shipped around 120,000, which is growth for them, although it's such a small number compared to their traditional PC business."

Microsoft shipped about 300,000 Surface devices in the quarter -- the Windows 8- and Intel-powered Surface Pro and the Windows RT- and ARM-reliant Surface RT -- to account for about 15% of the Windows total. "Microsoft's portion was relatively small," noted Reith, who also cautioned that because IDC tracks shipments -- tablets that come off factory lines -- actual sales were undoubtedly smaller than that. "We're pretty certain the shipment numbers are high[er] than sell-through."

IDC estimated that Microsoft has shipped approximately 2.1 million Surface tablets of all kinds since the October 2012 debut of the Surface RT.

By comparison, Apple shipped nearly 57 million iPads in the last three quarters.

Microsoft has struggled to keep Surface afloat. Last month, the company wrote off $900 million to account for the steep discounts on the Surface RT needed to unload excess inventory. Days later, it revealed that all Surface sales had generated just $853 million, less than the charge against earnings, less than the increase in advertising attributed to Windows 8 and Surface.

The company clearly over-estimated demand for the Surface, and for Windows tablets in general. "There's still more of a push for Windows 8 than a demand," said Reith, talking about the operating system on all platforms, PCs as well as tablets. "Microsoft thought this was a short-term thing. That was wishful thinking." Only later, in early 2013, did executives at the Redmond, Wash. company start talking about the long haul, he pointed out.


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