One of the hotter topics in tech this week has been the question of just how well Microsoft’s
(NASDAQ:MSFT) Surface Pro tablet has been selling in the wake of a lackluster reaction to the introduction of Windows 8.
Microsoft is one of many companies aiming to catch up with Apple’s
(NASDAQ:AAPL) iPad franchise, which created the modern tablet market in April 2010. (click to read my short-sighted first take on the iPad)
The word on the street (a.k.a. the tech blogosphere) is that eager shoppers are having trouble actually locating Surface Pros in stock, which is sparking the question that matters most to investors out in the real world :
Is this thing actually a hit?
At the most basic level, a sell-out happens because of a supply-demand imbalance -- basically, a case of more buyers than sellers.
However, a sell-out of a product isn't necessarily a reason to jump for joy, simply because they can be artificially created through limited supply.
Here’s how I think about this situation.
In the past, Microsoft has happily reported sales numbers for many of its products.
For example, on January 8, the company announced at the CES conference that it had sold 60 million Windows licenses to date.
On November 12, 2012, it was happy to tell the world that its Halo 4 video game hit $220 million in global sales on launch day.
And just this week, Microsoft announced that sales of its Xbox 360 gaming console reached the 76 million unit mark.
The question I'll pose to you is this: If the Surface Pro was selling in huge numbers, would the company not be announcing it to the world?
Wearing my Captain Obvious helmet, I will answer that question with an emphatic YES!
First, strong sales would help get app developers on board with the platform. As of yet, there are no native Facebook
(NASDAQ:FB), Twitter, Spotify, or Pandora
(NYSE:P) apps for the tablet-focused Metro interface side of Windows 8, which is a big competitive disadvantage against the iPad and Google
(NASDAQ:GOOG) Android platforms. (See: 5 Ways Microsoft Can Get Back on Track in 2013: Build a Better Ecosystem
Second, strong Surface Pro sales numbers would tell prospective customers that they are not risking an investment in a dying platform.
Take it from me! I actually owned a Toshiba HD-DVD player, and I felt like a real dope for having bought in to a system that didn't have a clear future.
So until Microsoft gives us some hard data, remain skeptical regarding how sales are shaping up out in the real world.
After all, initial data from research firm Canalys indicates that Microsoft's other tablet effort -- the Surface RT -- isn't off to a fast start, as just 3% of tablets shipped in Q4 ran on a Microsoft operating system. (See: With Surface, Microsoft Stands Little Chance of Competing With Apple in the iPad Market.)
Position in AAPL
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