Fri, Oct 19, 2012 - Page 13 News List

Researcher downgrades forecast for Microsoft’s tablets

By Lisa Wang  /  Staff reporter

US software giant Microsoft Corp is expected to sell just 2.5 million Surface tablets worldwide this year, posing a much smaller threat to other PC brands’ tablet businesses because of a less aggressive pricing strategy, Taipei-based market researcher WitsView said.

The projected sales of 2.5 million units is much lower than the 4 million units estimated by WitsView, a research team at TrendForce Corp (集邦科技), in June, after Microsoft announced it wanted to make inroads into the tablet market.

That means Microsoft would grab a 2.5 percent share of the 10 million tablets expected to be sold this year, rather than 4 percent.

Apple Inc’s iPad series still dominates the market with more than a 62 percent market share, WitsView said.

On Tuesday, Microsoft announced the prices of the newly unveiled Surface tablets running on ARM-based processors in a range between US$499 and US$699. Users have to pay an extra US$119 for a touch cover, or keyboard.

That is in line with the prices of mainstream tablets already on the market, WitsView said in a report released on Wednesday.

“The prices do not make [Surface tablets] particularly attractive [to consumers] in the competitive tablet market,” WitsView analyst Eric Chiou (邱宇彬) said. “The less aggressive pricing strategy looks like a compromise deal with PC brands.”

Microsoft’s pricing strategy mostly matches that of Apple Inc’s iPad family, Chiu said, but the iPad is outfitted with a much better touch screen than the Surface tablets.

An entry model iPad supporting a long-term evolution (LTE) Internet connection is priced at US$499 and the price goes up to US$699 if consumers chose a model with 64 gigabyte storage.

Compared with most tablets offered by PC brands, the price gap has narrowed to a tolerant US$100, allowing PC makers “to have a chance of surviving the game, without being seriously affected by Microsoft’s entry,” Chiou said.

There had been speculation that Microsoft could price its tablet at as low as US$399.

PC makers such as Acer Inc (宏碁) have been worried that Microsoft’s tablets would deal a blow to their tablet sales, given Microsoft’s strong pricing capability.

Microsoft was able to drive down the prices of its tablets as it does not have to pay the royalties for the Windows 8 operating system like PC companies do, WitsView said.

Acer chairman Wang Jeng-tang (王振堂) had warned that Microsoft’s expansion into the tablet market could jeopardize the whole PC ecosystem and raise a negative response from PC brands.

“Price is the key. We are closely observing this factor,” he told reporters in August.

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