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Microsoft Trumpets Stellar Surface Sales

By Peter Suciu E-Commerce Times ECT News Network
Dec 12, 2016 1:34 PM PT
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Microsoft on Monday announced robust sales of its Surface line ahead of the holiday season.

November was the best month ever for consumer Surface sales, according to Brian Hall, CVP of Microsoft devices marketing, who noted that Best Buy's exclusive bundle offering sold out on its first day.

The momentum has not been limited to the U.S. sales, Hall said.

The Surface recently had its single best week ever in the UK, and in Germany the Surface Pen became an Amazon best seller in PC accessories for more than 12 hours. The Surface recently became available in a number of new markets, including Australia and New Zealand.

The sudden surge follows this fall's unveiling of the Surface Studio and the Surface Dial, which provide new creative tools to users, and the Surface Book with Performance Base, which delivers twice the graphics power as its predecessor, along with 30 percent greater battery life.

The Surface Book with Performance Base will go on sale in Austria, China, France, Germany, Hong Kong, Japan, Switzerland and the UK starting early next year.

Giving Apple a Bruising

The Surface has exceeded Microsoft's expectations, performing well against Apple's rival Mac platform. Many former Mac users have switched to the Surface, according to Hall, and to encourage those defections, Microsoft introduced a MacBook trade-in program.

Rather than trying to copy Apple's success with its iPad line, Microsoft has been striving for market disruption, by offering a portable PC that sits somewhere between a tablet and laptop.

"Microsoft is actually releasing new Surface devices that offer meaningful differentiation, both compared to Apple and against previous devices," said Roger Entner, principal analyst at Recon Analytics.

"Consumers like the flexibility of tablet and laptop in one, whereas with Apple you have to chose one or the other," he told the E-Commerce Times. "That's the biggest difference -- but it's the one that matters."

Scratching the Surface and Then Some

The Surface slowly has gained traction since its release four years ago. Unlike many other products that Microsoft abandoned due to poor sales, the tech giant has stuck with this one -- refining it along the way.

"Microsoft has invested enormously in Surface and their efforts are finally paying off," observed Josh Crandall, principal analyst at Netpop Research.

"Surface is the kind of product line that Microsoft has had in mind through the development of Windows 10, an OS that performs the same way on every device," he told the E-Commerce Times.

Microsoft recently has begun to invest in hardware more earnestly than Apple has, and it "may not be impeded by historical silos that tend to emerge in big companies," added Crandall.

"Surface isn't simply a tablet product line," he said. "It's a touch-based computing platform that spans different screen formats and offers consumers two professional models."

Big November

Microsoft's investment in the Surface hardware was just one part of the success. The company also was very aggressive in its retail marketing efforts last month.

It mounted "top-notch advertising campaigns [that have] further sparked the imaginations of young creatives in a way that Microsoft never has been able to achieve," Crandall pointed out, and sales picked up as a result.

"Black Friday specials played a big role in Microsoft's strong November Surface activity," noted Rhoda Alexander, director for monitors and tablets at IHS Markit.

"Best Buy featured the Surface Pro 4 with the Intel Core M3 at US$599.99, a $400 discount off the regular price," she told the E-Commerce Times.

That was just one option for consumers, as Newegg offered the Surface Pro 4 with Intel i5 processor for $799.99, a $200 discount. Staples also discounted the Surface Pro 4 with Intel i5 to $799.99, added Alexander.

Those deals contrasted sharply with the potential savings consumers could get with a MacBook Pro purchase. "Most of Apple's discount offers were on products still priced above $1,100 after savings," Alexander pointed out.

"Microsoft has been doing a strong retail push, expanding its global footprint and its ad buy, she said. "All of these factors contribute to its Q4 success."

Changing Places

Microsoft and Apple did something of a role reversal with their most recent product updates, Alexander suggested.

"Microsoft directly targeted a demographic with strong loyalty to Apple through the years -- the high-performance graphics professional," she explained.

The updated Surface Book i7 boasts double the graphics capability of the previous version, with processors from Nvidia. It also has longer battery life, reportedly up to 16 hours. In addition, the Surface Dial, like the Pen, offers alternatives to traditional mouse and keyboard inputs.

"Microsoft is pushing the boundaries and taking the lead in developing new user interface models," said Netpop Research's Crandall.

"The new Microsoft Surface Dial is a great example of their progress," he said. "In comparison, Apple has a history of saying that touchscreen laptops won't work, illustrating different mindsets and road maps for different devices."


Peter Suciu is a freelance writer who has covered consumer electronics, technology, electronic entertainment and fitness-related trends for more than a decade. His work has appeared in more than three dozen publications, and he is the co-author of Careers in the Computer Game Industry (Career in the New Economy series), a career guide aimed at high school students from Rosen Publishing. You can connect with Peter on Google+.


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What's most likely to cost a company your customer loyalty?
a major product fail
major unethical corporate behavior
public advocacy of social or political views I oppose
a really bad customer service experience
stagnation -- I'm attracted to innovation
none of the above -- I'll stick through thick and thin