Why Is Microsoft Happy About This?

Well played, Microsoft (NASDAQ: MSFT  ) . The new Surface with Windows 8 Pro -- the usable version of the usable model -- is sold out.

The software giant's 128-gigabyte tablet running Windows 8 Pro is out of stock through Microsoft's online store. The handful of tablets allocated to the only two retailers stocking the Surface also appear to have run out of the device.

We know what Apple (NASDAQ: AAPL  ) has done after successful launch weekends. The tech giant has shouted its record sales numbers from the Cupertino rooftops. Microsoft hasn't followed suit. Issuing a press release singing the praises of heavy demand would be incomplete without providing an actual figure on the supply, and it's easy to see why Microsoft doesn't want to do that.

When the original Windows RT-fueled Surface hit the market in October, Microsoft also was out of stock of one particular model. A few weeks later, analysts were slashing their sales targets. As the understandably biased Apple Insider blog points out, the Zune HD also sold out at its launch four years ago.

So where do we go from here?

It's easy to see why nobody wants the 64-gigabyte model. By Microsoft's own admission, the entry-level Surface with Windows 8 Pro has just 29 gigs of available storage out of the box. Who wants to pay $900 for a tablet so limited? The allure of running Windows 8 is tacking on Office and other Windows software, but one can only imagine what the data capacity will be after those programs are downloaded.

In other words, the $1,000 128-gig model -- or $1,130 once you add the keyboard cover -- is really the only Surface worth owning. Reader comments on Microsoft's blog are expressing frustration at retailers that didn't have many -- if any -- of those tablets available this weekend.

Microsoft can argue that this is a good problem to have. It's better to be Microsoft with not enough tablets than it was to be BlackBerry (NASDAQ: BBRY  ) with too many unwanted PlayBook tablets two years ago. BlackBerry had to slash prices to clear them out. Microsoft won't have to worry about that at the moment, though one has to wonder how long it will be before the RT models are put to pasture.

History will reveal if this weekend's Windows 8 Pro launch was another Zune HD or if Mr. Softy finally has a hit on its hands. Until Microsoft has proved that it can score a hardware hit other than the Xbox console, the smart bet has to be on the side of skepticism.

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  • Report this Comment On February 12, 2013, at 9:11 PM, techy46 wrote:

    The real Surface Pro has been selling since the 2012 Holiday season for %1049 and up and it's called the Lenovo Yoga 13. It sold out. Next we'll see the Helix at $1400 or more. Microsoft's Surface Pro is an interesting design target but there are really quite a few better W8 Ultrabooks and tablets coming.

  • Report this Comment On February 13, 2013, at 12:28 AM, RandomMeaning wrote:

    I think Microsoft took a very calculated risk trying to sell to the most devoted members of their fan base. Reviews have been fairly critical of the Surface family, even on some of the Windows fan sites I've read (although some Windows fan sites are absolutely convinced that Surface will dominate in both tablets and laptops). Who better to evangelize than the most avid and supportive Microsoft fans? So, Microsoft limited the number of Surface Ps at launch. They had no intention of going mass market because the vast majority of consumers had zero interest at that price point.

    This is evident from the fact that the 64 gig version didn't sell out on line, nor in the Microsoft stores, or even at Office Depot and Staples. Even though Office Depot and Staples had only 1 or 2 of the variants for sale!

    What does that mean? Microsoft fans would have done their homework and known full well that 64 gigs wouldn't be enough due to the limited amount of usable disc space. They knew that even though they could use an SD card, it wouldn't be easy to use that SD card for installing applications. Files and media, fine. But applications would require knowledgeable changes in registry. So, the informed Microsoft fans targeted the 128s and refused to settle for the 64s.

    Casual computer users (which most people are) would not be aware of this. Comparing it to an iPad or Android tablet, 64 would sound pretty good if they didn't know about the limitations. And being able to swap SD cards would sound good to them too, just figuring they could swap applications around as easy as the SD cards in their cameras.

    Quite simply, the casual computer users looked at the Surface and concluded it was some sort of expensive netbook with a touch screen. Why get that when they could get a real laptop with more features for much cheaper. Some readers might say, "but it's a tablet too" but pretty much all of the articles and reviews completely ignore the tablet part (for good reason since it's a horrid tablet) and focus on how it can be used as a small laptop (and a rather problematic one at that: the touchpad is too small, the kickstand is nowhere as useful as an adjustable hinge, and base is nowhere near as supportive as a laptop).

    As a result, Microsoft's gamble has actually dinged them a bit since it looks very much like gamesmanship to limit the supply. This was not helped by Microsoft's leadership crowing about "selling out" and "great interest" without actually backing it up with any sales numbers. People aren't impressed with a sell out when there only one or two in major office chains and, according to reports, an average of 150 at each Microsoft Store. That's not even enough to cover Microsoft's own employee base, let alone supporters in the IT industry. On the plus side, Microsoft has learned that there are devoted fans willing to pay top dollar for more storage. I would be surprised if Microsoft didn't drop the 64 variant and add a 256.

    Once again, the efforts of talented employees at Microsoft are being hampered by execs more interested in appearances than substance. Would not be surprised to learn that some earned bonuses for "shipping by February" and "selling out a new product line".

  • Report this Comment On February 13, 2013, at 8:45 AM, infektu wrote:

    InfoThatNeedsHelp,

    Still chasing BBRY ..?

    got a life yet?

    "do you admit" ?!? wow, imagine if you did not admit it...

    In passing, Surface and PB do not address the exact same needs.

    PB is a 7" 32GB that costs a quarter of what a fat Windoze slate costs.

  • Report this Comment On February 13, 2013, at 10:31 AM, CluckChicken wrote:

    "For the folks with platinum Visa / MasterCard, the machine is hands down the MacBook Pro 17" Retina with 16 Gig Ram, i7 4.2 Ghz, 768 Gig SSD which comes with a $3799 price tag."

    LOL. For that price you could get an Alienware laptop that will run circles around the MacBook and pick up a surface as well.

  • Report this Comment On February 14, 2013, at 12:09 AM, walteru wrote:

    I bought the Surface Pro on Saturday, and I can say that it has change the way that I will be doing my work. This is all I need to use.

    I see a lot of speculation and comments that are from people that don't have one. To me it is like commenting on a car without actually driving it.

    I have three generations of iPads. I stood in line for 2 hours to get mine when it first came out. But anyone that owns an iPad guarantees has another computer. The Surface Pro is the first tool that eliminates the need for a desktop, or a laptop.

    Needless to say, there may be issues with the Surface, and sooner or later there will be others like Samsung, and Lenovo, ACER, ASUS, SAMSUNG etc. making faster products with greater battery life, smaller screens, lighter weight, more memory or with 4g. But what they will have as the backbone is Windows 8. And folks, that is where good `ol Microsoft will reign again. Because let's face it. Apple is a hardware company. And until they make their software that can come close to what Windows 8 can do, who is going to want just an old iPad IOS 6 or anything running an OS X Mountain Lion?

    Is Linux, Google, Blackberry, coming up with anything remotely close to the Surface Pro?

    The greatness of the iPad are the Apps. But when these App developers jump ship and start making their Apps compatible for the Windows 8, which is just a matter of time, the biggest baddest tablets out there will be running a Windows 8 OS.

    The hottest most in-demand hardware out now are tablets. And if any company out there has one that is not running a Microsoft OS that can beat the Surface Pro, please let me know.

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