“MKM Partners’s Isreal Hernandez today cut his fiscal 2013 and fiscal 2014 estimates for Microsoft, and cut his price target to $28 from $32,” Tiernan Ray reports for Barron’s, “while reiterating a Neutral rating on the stock, writing that sales of the company’s Surface tablet computer appear to be tracking lower than he’d expected, and given that the recently released Windows 8 appears unable for the moment to kick-start PC sales.”
Ray reports, “Hernandez is now modeling 3.3 million Surface sales in the fiscal year ending next June, and 6.6 million in the following year, below his prior estimates for 4.5 million and 10 million, citing “in-store checks” he has conducted: ‘However, Surface RT, launched on October 26th, appears to have been met with little consumer enthusiasm to date and has been hampered by limited availability (Surface can only be purchased online or in a few dozen Microsoft stores). In addition, the Intel-based Surface Pro will be launched in January 2013 at an $899+ price point, a level that we do not view as competitive with alternative tablets such as the iPad.'”
Ray reports that Hernandez also writes, “Based on multiple checks and industry data points, we believe Windows 8 and the Surface tablet are off to a challenging start… The following data points, supported by our recent in-store checks, point to initial weak sales of Windows 8: Windows sales are down 21% y/y in first four weeks post the Windows 8 launch. Windows 8 tablets described as ‘non-existent’ (NPD 11/29). ‘Microsoft originally expected to ship four million Surface RT devices by the end of 2012, but has recently reduced the orders by half to only two million units.’ (Digitimes, 11/28/12) ‘Demand for Windows 8 is not that good right now,’ David Chang, CFO, Austek (WSJ, 11/27/12).”
Read more in the full article here.
MacDailyNews Take: There’s a mountainous iceberg lying in wait, just below the Surface.
Related articles:
Why Microsoft’s Surface tablet is doomed – December 5, 2012
App developers shun Microsoft’s Surface tablet – December 4, 2012
Microsoft Surface Pro to offer only half the battery life of Apple’s latest iPad with Retina display – November 30, 2012
Microsoft’s Surface Pro iPad killer to start at $899 – November 29, 2012
Microsoft’s Surface tablet flops, orders reportedly cut in half – November 29, 2012
TechCrunch’s Siegler reviews Microsoft Surface RT: ‘It’s time for a drop test – right into the garbage can’ – November 19, 2012
Slate reviews Microsoft’s Surface tablet: Too slow, mercilessly buggy; why is it so bad? – November 6, 2012
InfoWorld reviews Microsoft Surface RT: A disappointment; you’re better off with Apple’s iPad – October 31, 2012
Gizmodo reviews Microsoft Surface RT: Do not buy; inferior to Apple’s iPad; the worst of both worlds – October 25, 2012
The Verge reviews Microsoft Surface RT tablet: ‘The whole thing is honestly perplexing; who is this for?’ – October 24, 2012
ZDNet’s Kingsley-Hughes: Microsoft’s Windows 8 is an awful, horrible, painful design disaster – June 8, 2012
Analyst meets with big computer maker, finds ‘general lack of enthusiasm’ for Windows 8 – June 8, 2012
Dvorak: Windows 8 an unmitigated disaster; unusable and annoying; it makes your teeth itch – June 3, 2012
The Guardian: Microsoft’s Windows 8 is confusing as hell; an appalling user experience – March 5, 2012
More good news for Apple: Microsoft previews Windows 8 (with video) – June 1, 2011
With the exception of geeks, I can’t imagine getting 3 million people duped into buying a surface tablet. At least the geeks can always put linux or perhaps windows 7 on it after finding win8 being crap…
The current Surface is the “RT” (ARM-based) version, so it can’t run Window 7 or Linux (unless there is a distribution that will work on it).
Maybe on the “Pro” version, if that “novelty” is worth spending $1000+ to some poor geek.
estimates on lower than expected Surface, Windows 8 sales… who would expect more sales? Nobody here
I suspect all the Surface tablets in use can be found on the set of Hawaii Five-O
That’s good. One question, though, why particularly H-50? I don’t watch it so apparently these bombs are liberally scattered about the sets?
Microsoft is paying big bucks for product placement across a bunch of shows. It can be funny to watch because it’s often more than just a product used naturally in context.
I love to see television siphoning tons of money running ads from Microsoft to no avail.
Got it! I love it how many other shows simply use Apple products freely – great advertising for Apple. Not to mention commercials that show computer screens that have obvious Apple windows open (love the iconic red-yellow-green in the upper left corner).
I assume Microsoft also count (1) Windows 8 licenses used internally at Microsoft + (2) Windows 8 systems displayed in MSFT Stores as “sold”. ?!
HA! Love the MDN pun on the “Surface.”
Nice one MDN.
But the Surface only takes a few seconds to open the kick stand and connect the keyboard and then only a few seconds to wait for it to boot and then only a few minutes to figure out how to make it do something useful (well maybe a few more) and it is not very expensive compared to an ultra thin laptop.
It should take off right?
…”and given that the recently released Windows 8 appears unable for the moment to kick-start PC sales”… – how could they even begin to think that W8 WOULD EVER kick-start PC sales?
PCs are inherently non-touch devices, W8 is focussed almost entirely on touch: ergo – complete incompatibility problem. Totally bonkers the bloody lot of them.
Good weed in Redmond
I once worked with an old navy guy who liked to tell that the real difference between submarines and surface ships is not the ability to submerge (both can do that), but rather the ability to un-submerge. The Surface has only one way to go, down to the bottom of the sea.
Aye! Down and under to Davey Jones’s locker for this sad lot. The Captain sure looks dapper though… for as long as it takes, mate.
Go Apple!
Hang in there APPL holders, this whole deal is bullshite. We all know it.
Windows 8 and the Surface tablet are off to a challenging start…
Hilarious.