Friday, February 01, 2013

Surface RT tablets troubled by low sell-through, high return rates: IDC

Market research firm IHS iSuppli reported on Wednesday that Microsoft's Surface tablet sales fell well short of its shipments. Although Microsoft shipped about 1.25 million Surface RT tablets into the sales out of the channel "were significantly lower, maybe on the order of 55 to 60 percent of that figure," according to Rhoda Alexander, an analyst at iSuppli.

Those percentages would put Surface RT tablet sales, vs. shipments, at around 650,000 to 750,000.

Alexander added, however, that Microsoft's much lower "sales out" percentage is not unusual. She noted that she has seen similar percentages with newly introduced Android devices.

As you might -- or might not -- expect, these "sales out" percentages don't apply to Apple's devices. There, the percentage is typically in the mid- to high-90 percent range, if not higher. Apple reported sales -- not shipments -- of 22.9 million iPads in its most recent reported quarter, calendar year Q4 2012 or fiscal Q1 2013.

In addition, Surface RT has a very high return rate, said Alexander. "If you put the high return rate together with low sell-through [sales out] rate, that's indicative of a problem." She added, however, that the Kindle Fire initially had very low sell-through and very high return rates.

The high return rates, though, point to a problem with the Windows 8 OS. Surface RT tablets run an ARM-compatible version of Windows 8, Windows RT. Alexander said, "[the high return rates] seems to be linked in a lot of cases to a steep learning curve of the [Windows 8] OS -- which is not necessarily intuitive."

Another problem exists, too. Alexander said there is a "distinct lack of interest" from OEMs in terms of producing Windows RT devices at the moment.

Microsoft is about to bring out a second line of tablets, the Surface Pro, that runs the full version of Windows 8 Professional on top of a, Intel Core i5 processor. That device will run any program that runs on a laptop. Alexander said there is more momentum industry-wide for these Windows 8, as opposed to Windows RT, tablets.

Microsoft's Surface Pro tablets will arrive on Feb. 9, at Best Buy and Staples stores, as well as at Microsoft stores and Microsoft's online store.

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