Analysts and sales insiders warn that Microsoft Surface RT tablet seems headed for an epic fail

The bad news keeps coming for Windows RT: Insiders and analysts say that the sales of Microsoft's RT-based Surface tablet are bad, getting worse, and may never meet Microsoft's hopes.

Bloomberg reports that three insiders privy to Microsoft's sales figures say that only a little more than 1 million RT-based Surface tablets have been sold since the Surface's October launch. That's well below the expectations of Microsoft and analysts. For example, the article notes, UBS AG analyst Brent Thill had initially projected that Microsoft would sell 2 million Surface RT tablet just in the December quarter.

There's no sign of improvement on the horizon. Alex Gauna, an analyst at JMP Securities LLC told Bloomberg:

"It's pretty clear that things were bad entering the year, and at least for the moment they're getting worse. The path to a successful Surface, in the same way that they were successful with Xbox, is not very clear to me right now."

This is the latest in a long string of bad news for the RT-based Surface. An IDC report estimates that Windows RT will have only 1.9% of tablet market share in 2013, and by 2017 will only grow to 2.7% of the market. The outlook for RT is so bad that Tom Mainelli, Research Director, Tablets for IDC, says Microsoft should abandon it and focus on full-blown Windows tablets:

"Microsoft's decision to push two different tablet operating systems, Windows 8 and Windows RT, has yielded poor results in the market so far. Consumers aren't buying Windows RT's value proposition, and long term we think Microsoft and its partners would be better served by focusing their attention on improving Windows 8. Such a focus could drive better share growth in the tablet category down the road."

And there's even more bad news for RT. Samsung has canceled plans for selling an RT tablet in the U.S. Acer hasn't yet released an RT tablet, and it looks as if it might not.

The full-blown Surface Pro, on the other hand, seems to be doing somewhat better than the Surface. Released a little over a month ago, 400,000 of them have already been sold, Bloomberg reports. There's been enough demand that it has on and off been sold out. Some people claim that Microsoft may have produced too few  so that the sell-outs would make it appear they're a hot commodity. But the shortages have continued even after launch, so I don't think that's the case.

IDC analyst Bob O'Donnell said this to CNet about the 400,00 figure:

"That's a respectable number and it leads me to believe that Surface Pro will end up outselling Surface RT...It's something that we've predicted all along because of the compatibility that Surface Pro offers."

My guess is that eventually Microsoft will kill RT. Sales are dismal and don't appear to be getting better. There's no clear value in tablets that are as expensive as full-blown Windows tablets, but don't offer all of Windows features, such as the ability to run desktop applications. Having to develop, market, and support RT as well as Windows takes time and energy away from Microsoft's focus on Windows. Microsoft should follow IDC's recommendations and kill RT.

Copyright © 2013 IDG Communications, Inc.

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