Sales for the Microsoft Surface RT tablet since its release almost three months ago have been well under expectations, which not only hurts Microsoft's bottom line, but apparently it is also making hardware partners skittish.
In a story in Business Insider, UBS analyst Brent Thill estimates Microsoft has sold only 1 million Surface RT tablets. Thill had forecast 2 million. For some perspective, Apple is estimated to sell close to 20 million iPads for the same timeframe.
OK, Apple has a zealous, some would say cult-like, customer base already entrenched. So a new product like Surface RT doesn't stand much of a chance going head to head with the iPad. Yet the Surface sales are alarmingly low, and it's affecting Microsoft partners' decisions to put Windows RT on their precious hardware.
Namely, Samsung. The Korean electronics giant said at last week's CES show, according to a CNET story, that it will not be launching the Ativ Tab -- its Windows RT tablet running Qualcomm's Snapdragon ARM-based chips -- in the U.S. due to lack of demand in retail and a lack of understanding by consumers about the benefits of Windows RT. Yes, this is the same tablet that Microsoft CEO Steve Ballmer showcased during his guest appearance at the CES 2013 keynote. So much for that sales pitch.
The Samsung ATIV Tab, not coming to a store near you.
Mike Abary, Samsung's senior vice president of its U.S. PC and tablet business, was quoted in the CNET story as saying:
"There wasn't really a very clear positioning of what Windows RT meant in the marketplace, what it stood for relative to Windows 8, that was being done in an effective manner to the consumer. When we did some tests and studies on how we could go to market with a Windows RT device, we determined there was a lot of heavy lifting we still needed to do to educate the customer on what Windows RT was. And that heavy lifting was going to require pretty heavy investment."
Abary added that Samsung found it would have to make tradeoffs with its Windows RT tablet – such as reducing the amount of memory -- to bring down the price to where Samsung thought it should be and the company wasn't willing to do that.
It's worth noting that Samsung is not permanently dismissing the Ativ Windows RT tablet, but is just going to hold off until Windows RT shows more market demand.
You have to wonder how much of this is just consumer confusion about the name, "Windows RT." Is it the same as Windows 8? Is it a completely different operating system? The device itself is fairly user-friendly and is really just Windows 8 running on a more power efficient chip (ARM) with better battery life and a lower price point, but with no support for the traditional desktop software that you will find in Windows 8 devices.
But the general public doesn't want to hear all that. It's too complicated. So Windows RT is perceived as alien and intimidating when it's not. If Microsoft had kept the branding simple and called Windows RT "Windows 8 Touch" or "Windows 8 Tab" then consumers would understand it better ("Oh I see, it's Windows 8 just tabletized") and retailers could explain it better.
Clearly, the poor branding and poor demand has turned off Samsung. And of all the hardware partners to publically ditch you, you don't want it to be Samsung, just about the hottest company in the tech universe right now.
Microsoft better hope this is not a trend that HP, Lenovo and the rest of the OEM gang follow. Surely, Microsoft needs Windows RT to run on more devices than its own Surface tablets.