The Lazy Blogger

“Damned if we do, Damned if we don’t” – Is 15M on day 1 bad for @Surface Sales?


By Sumit

So the much awaited Surface Pro was launched on Saturday and I was having fun watching the excitement from the sidelines, till the tweets about ‘Sell out’ started trickling in. Funniest was one from Jeff Attwood!

I piled on with the following -

However my @Surface stream on Tweetdeck was filled with complaints from folks genuinely interested in the the Pro but returned home empty handed because their nearest retailer didn’t have enough Surface Pro’s (128G was in greater demand than 64G).

By Sunday everyone was up in arms (virtually speaking).

So I did a little rough calculation

1. There are about 70 MS Stores in US and Canada. If each store stocked 50 Surface Pro each they would have 3500 devices. Outer limit 100 per store gives 7000 Surfaces.

2. There are around 1000 Best Buy Stores around the US and most people on Twitter complained that the BB had 2-5 Surfaces only. Most of them the 64GB version. So 1000 x 5 = 5000 devices.

3. Then we had Microsoft Store online that sold out on all the Surface 128 Gigs in a few hours and the 64Gigs later (now the 64 Gigs were back in stock). So let’s say they had 10,000 devices.

I didn’t bother with Staples but say they pulled the same number as Best Buy at 3000-5000 devices.

That’s a total of 21,500 to 28,000 devices on day 1. At $1000 bucks a device that $21,500,000-$28,000,000 in sales. Not bad at all! This is a little different from my original estimation on Twitter earlier -

But all this is speculation. For all we know Best Buy had only half those numbers and Staples had even smaller numbers. Sales could be as low as 15-16K devices. That’s still 15M in sales on day 1.

Then why are people riling MS because they ran out of Surface stock?

Well for one, when a blog with the name ‘AppleInsider’ brings about the ‘sellout’ comparison with Zune you can always take it with a pinch of salt. But Zune did happen, and so did the Surface RT which was similarly out of stock after initial launch. So people are ruffled by the suspicion that MS was deliberately playing it safe and creating artificial scarcity to show ‘sell-outs’. While I cannot fathom a reason for such a tactic, if it’s was even remotely in their heads, I would say BAD MOVE and a missed opportunity!

Next, who runs ‘out of stock’ in a online store unless you have run out of your entire inventory and refilling it would mean firing up the entire supply chain again and you don’t know how long that will take? Why could MS take back orders?

Next, Microsoft’s lack of numbers. If they were to declare the numbers they sold over the weekend on Monday or say in 5 days, it would be a smack in the face of these bloggers. As I showed above, 15K x 5days would be 75K Units in < a week, with almost 75M in sales. Those are good numbers!

To be honest, the Tech Blogging world can be damned, most of them are Apple fanboys anyways, why bother. So MS (and some of it’s evangelists) would do well to ignore the naysayers and spend efforts in figuring out the ‘rocket science’ that is ‘demand v supply’ relationship. It’s an extremely difficult thing to do and MS’ investments in Dell is a tacit acknowledgement of this fact (that they don’t have the distribution muscle or the supply chain expertise to be a strong devices company on their own. XBox is not enough!). But Apple has mastered it, so if you want to fight Apple, you’ve to get guns to all your fights not just the design and aesthetic one!

Also, for a change, give us some real numbers instead of 60M licenses crap!

Go Surface!

Surface is a very nice set of devices, I already got the RT. If I had an immediate need for a portable computing device I would have blown a good $1,100 on it and begged someone coming from US to get the Pro for me. But right now I don’t have the need, so I’ll wait till the Haswell processors starting coming in, giving the battery life a kick in the pants and hopefully a higher memory config for the device itself (8 Gigs to start with).