Will the Microsoft Surface Tablet Go the Way of the BlackBerry PlayBook?

By , dealnews Senior Feature Writer

Microsoft is in trouble. Despite its aggressive marketing campaign, sales of its new Surface RT tablet — which the company boasted would combine the best elements of a laptop and a tablet — are well below expectations. According to estimates from Boston-based brokerage firm Detwiler Fenton, Microsoft is on track to sell between 500,000 to 600,000 Surface RT tablets in the December quarter — far below its expected sales of 2 to 3 million.

However, Microsoft's troubles could spell good news for consumers, as high inventory of an ailing Surface RT could spark a flurry of deals. But why is Microsoft's much-hyped Surface RT tablet struggling in the first place?

For starters, Microsoft has been very controlling about how its Surface RT tablets are sold. At the moment, they can only be bought directly from the Microsoft Store online, at pop-up boutiques, or at Microsoft retail stores. Lukewarm media reviews have also chilled shoppers' wallets, as they turn to other tablet manufacturers (with well-established app stores) for their needs.

But most importantly, in the weeks since its debut, we've yet to see a deal on a Surface RT tablet. And at a time when $199 mainstream tablets are becoming the norm, the Surface RT's high $499 price tag is undoubtedly hurting it. Especially since we've seen discounts on every other tablet currently on the market, including the latest batch of Apple iPads.

Surface RT Price Could Drop 38% Within 2 Months

So when can we expect to see deals on Surface RT tablets? To find out, we turned to the Blackberry Playbook. Now, we are in no way implying Microsoft is in the same boat as RIM, but its Surface RT Tablet could wind up walking down the same plank as the Playbook.

Like the Blackberry Playbook, the Surface RT tablet has debuted to mediocre reviews. However, whereas the entry level Playbook dropped 6% in price six weeks after its debut, Microsoft is showing no signs of discounting its tablet in the near future. In fact, during the biggest shopping days of the year, Black Friday and Cyber Monday, Microsoft discounted everything but the Surface RT. (By comparison, Apple, Barnes & Noble, Best Buy, and Amazon slashed prices on pretty much every tablet on the market.)

While a potential 6% price drop may sound like a good deal for some, true bargain hunters may want to hold off a little longer, as just five months after the Playbook's debut, the 16GB Playbook dropped 38% in price. Even the higher 32GB model dropped an impressive 33% in price during the same timeframe. And the deals only got better from that point forward. In fact, in an effort to move inventory, some retailers, like Office Depot, began discounting the Playbook and bundling it with $100 gift cards. Again, this was just five months into the tablet's lifespan, which means we could see hefty discounts on the Surface RT as early as March 2013.

And while it's anyone's guess just how low the Surface RT tablet can fall, keep in mind that last month we listed the 16GB Playbook for an all-time low of $130. That's a whopping 74% off its initial list price. (Granted, it took 19 months to reach this low.)

What's Next for Surface?

Microsoft has confirmed it will debut its Intel-powered Surface Pro tablet some time in January for a starting price of $899. Price-wise, that puts it higher than every mainstream tablet available today, higher than many of today's ultrabooks, and considerably higher than many of the Windows 8-powered laptops we've seen these past few weeks.

However, the Surface Pro tablet is a different beast altogether. Unlike the ARM-powered Surface RT, the Surface Pro will pack more traditional hardware and it'll be capable of running existing Windows programs in addition to new ones designed for Windows 8. (Due to its architecture, the Surface RT can only run Windows 8 apps and not legacy programs.)

With two tablets on the market, Microsoft would be wise to discount its entry-level Surface RT tablet, so at the very least we recommend holding off till the Pro's debut before making any purchasing decisions. If you still can't wait till March for the first deals, then shoppers should wait until the Surface RT has better distribution. In other words, wait until you can walk into a Best Buy and see it in person, as third party retailers are more likely to discount the tablet (or bundle it with a gift card) than Microsoft.

An avid gadget lover, Louis Ramirez has covered technology for Gizmodo, CNET, Laptop, and various other publications. Follow him on Twitter at @LouisRamirez.

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DealNews may be compensated by companies mentioned in this article. Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).


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trent armstrong
You guys should really consider deleting articles like this one... I just finished reading it, was going to make a post on the fact that there is a load of incorrect information in the article, only to now see that it was written a year ago... the reader version of the post doesn't include the publication date so I wasn't able to see this until I had already read the whole thing and closed the window. Not very pleased to have my time waisted reading outdated information.
Louis Ramirez (DealNews)
@pjbeaton The reason Surface RT is moving to retail stores is to help MS jump start sales of the tablet in the first place. One of the pluses about that is that now there's a better chance of you seeing a discount on Surface RT.
If this were true, why is Microsoft increasing their production of the Surface and starting to sell them in retail stores?
I have had the surface since launch and it is a complete joy to use. Articles like these do nothing but make those on the fence sit it out. This is a quality product that has to also fight the negative perceptions. The playbook is also a great product that no one really knows about...the touchpad was yanked before it even made a sale. As always, it is very difficult to break into a market that has its established players.
i'll buy one for 150 bux just like when i scored the HP touchpad last year when HP punked out. i am not sure if this thing will do well. people really dont like Metro User Interface so much and i can count the number of times i've seen a windows phone used in public on one hand. not good for microsoft. stay with what you are good with microsoft. Windows, Office Programs and Xbox. thank you.
To all the MS lovers out there... it is not what the product can do but what the product represents. Just having great ideas on how to cook does not buy me any lunch. I saw the Surface and agree it is a decent product but what it can do and what it will do for future development is still a big mystery to me. The IOS product line success is attributed to simplicity, excellent design criteria and marketing. We all want to believe there are better products than the IOS world and guess what they are out there but like the Surface, they all fade too soon from peoples memories by the time the new kid on thee block arrives with the flashy car until his tires wear out.
"hey everybody, soon ms will start giving surface tablets away...no need to buy it". its almost as if the tech media is doing everything they can to stunt the sales.
The Surface Pro will definitely be less powerful than an Intel-based laptop running Windows 8, and probably less powerful than an Atom-based ultrabook running Windows 8.

A touchscreen interface and a tablet form-factor will only make a minor difference to consumers who care about this aspect of their purchase.

And for the vast majority of other consumers, they are more interested in what is already selling well, used by their friends, and readily available: in other words, iPads and Android tablets.
Wow- talk about made up news.
There are a bunch of analysts all of whom seem to have different estimates of Surface sales. I've seen 1.5-2 million from one other analyst and 1-1.5 million from another. The fact is no one knows how many surfaces have sold except MS. You have just picked the lowest estimate and published it as fact.
As to the discounting of the Surface, I have seen no evidence that MS will discount the Surface similarly to the Playbook. I can say here in this comment "The Surface RT could drop 2% within the next 2 months" and it has just as much validity and accuracy as your 38% pronoucement, as would the headline "MS will give away the Surface RT within 2 months"- after all Google gave away the Nexus Q because it was a flop.
If you're going to engage in rampant speculation, at least make it clear that's what you're doing.
I tried Windows 8 for two-weeks then went straight back to Windows 7. Once I am finished with that I am seriously considering jumping ship to iOS as MSFT is making too many balls-ups and us loyal customers are the ones paying for it,
Bad tablet and outrageous price. All aps are for Android and iOS. Why using a tablet without apps? And why developing apps for an overpriced tablet that few users will buy? M$ overslept the lucky hour. It's failure with tablets is imminent due to lack of support of all legacy apps that users may really need. But even their support on a tablet doesn't make them user friendly.
A small portion of users really need the M$ Office on their tablet (even though it is not completely compatible with older M$ documents). May be they even think it is a good idea to work with documents (not just to edit them slightly) on a tablet.
Windows 8 tablets might appear more lucky, but don't expect them to be reasonably priced.
BOTTOM LINE: Don't see any reason to buy a Windows RT tablet, unless you're an M$ fanboy or need the M$ Office.
There is just one maker of a tablet with the blackberry tablet OS (excluding Amazon's use of the basic reference design in the first Fire). A better comparison would be Google's hardware both are more or less reference designs and both companies have 3rd parties hardware makers that won't stand for something like that ridiculous $200 pricing rumor that went around. The price appears correct for setting a device meant to set the bar for features for companies like Dell, Acer, HP, IBM, Samsung, etc. Outside of that, it was just in the past week (or not yet even) that you could buy a Surface RT tablet from anywhere other than a Microsoft store (online or b&m). Even the nexus tablets were available at Staples early on, and you can buy the iPad anywhere these days.

If you're looking for a fire sale, look to one of the other companies making RT tablets who may decide to bow out of RT hardware and just skip straight to 8 Pro based tablets.
Surface redefines the tablet category, and it is just plain stupid of these bloggers not to realize it. Firstly this is a tablet that runs a full desktop grade OS, the only restriction is the support for legacy application ports (x86 to ARM) and for a very logical reason.
It is the first multi-user, touch + mouse/keyboard friendly OS that has robust file system access including network shares (SMB) and desktop grade utilities like file explorer, task manager, disk manager, power shell. Not to forget it also is the only tablet that can identify 450,000,000 devices through its full USB port and WiFi. Then add to it Microsoft Office. Surface is much more than a regular tablet and is rightly priced.
It is less than 2 months of its release, and predicting failure and comparison to Playbook is just plain stupid. Playbook does not have the ecosystem Windows has. The Windows 8 desktop OS sold 40 million copies in 1 month, and the momentum will help Surface in coming year.
Ok, You saying Microsoft isn't RIM, but then you compare to the playbook. For one thing, the Surface is part of a much larger ecosystem, unlike the playbook. Developer interest in the Win8 platform will increase as more Windows 8 PCs sell. Just look at the Windows Store. It's one of the fastest growing app stores we've seen.
For another thing, the Surface wasn't designed to sell in tremendous numbers. Microsoft wants to sell them (they aren't just reference designs. They're flagship designs.) but they aren't expecting to sell a hundred million of them. I wouldn't expect huge price cutting to get rid of inventory, at least not in the short term. They could drop the price when new Surface models come out, but not price dropping in the same vein as the Playbook or for the same reasons.
Finally, this is all based upon unfounded numbers. We'll see what the real reports say.
I'll leave you with Ed Bott's comments on this post: https://twitter.com/...t/status/278543863591866368
There is absolutely nothing wrong with the Surface. It is fantastic and MS should be gaining market share with it. It's innovative and ground breaking. Yet people continue to buy iOS devices when they should be exploring better alternatives like the Surface. I feel for MS because I think they are really trying here and it's a great product. Why iOS devices continue to sell like they do is a complete mystery and built on nothing more than name recognition. What high tech company in history can basically not change anything about their UI for 5 years and still out sell everyone else? iPad = 10" iPhone, iPad mini = 7" iPhone and yet people buy them like they're the latest and greatest thing to hit the high tech world.
Good article. But RT hardware itself is basically a Asus Transformer 300 inside. It should cost more than 300 and you shouldn't spend more than 350 for it.

You should point users to W8 Atom tablets, their prices are also dropping and they can run real windows.
God...until M$ gets rid of Balmer...M$ is nothing more then a "has-been" company...surprised Bill hasn't come back to try to save the company.