Market Overview

Microsoft Surface May Achieve 1% Market Share In 2014 (MSFT)

Microsoft's (NASDAQ: MSFT) next-generation Surface tablets could prove to be more popular than the last.

According to DigiTimes, the Windows maker sold 900,000 Surface tablets during the first quarter of 2013 and an additional 300,000 units during the second quarter. All told, Microsoft sold roughly 1.2 million tablets during the first half of the year.

In 2014, Surface shipments (but not necessarily sales) are expected to reach three million units. This could allow Microsoft to achieve a 1.15 percent share of the global tablet market.

Thus far, Microsoft's Surface tablet has not proved to be the company's most successful device. From October 2012 through June 2013, the combined sales of Surface RT and Surface Pro came to $853 million.

For the right product or service, $853 million is a lot of money.

Related: Microsoft's $449 Surface 2, $899 Surface Pro 2 Coming October 22

Unfortunately, Microsoft took a $900 million write-down on its Surface tablets.

If sales could double in 2014 (and continue rising from there on out), Surface may slowly work its way toward profitability.

This could be helped by Microsoft's new idea to develop unique touch covers for the device. The first is designed for aspiring DJs and other music lovers, but there is limitless potential for additional covers that cater to a wide range of users.

In addition to Surface shipment estimates, the DigiTimes report also stated that tablet growth is beginning to slow. Full-year tablet shipments were expected to grow to 70 percent in 2013. They are now expected to increase 60 percent.

In 2014, growth may drop to the 25-30 percent range.

This could be due to market limitations (there are only so many tablet customers available worldwide) or the simple fact that tablets are not replaced as often as smartphones. If consumers hold onto their tablets for a few years or more, the industry could one day experience massive fluctuations -- similar to the TV industry.

Ten years ago, TV sales were huge. After millions of consumers purchased at least one high-def TV, sales began to decline.

The same could happen to tablets.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ

Posted-In: Digitimes Microsoft Surface Surface Pro Surface RTNews Rumors Tech Best of Benzinga

 

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