14 DAY TRIAL // Microsoft has invented new product categories with its Surface models, and after reaching record sales for the 2-in-1 market, the whole lineup has started declining, with the company posting a 26 percent revenue drop in the last quarter.
The decline was mostly caused by the lack of new models, but Microsoft expected sales to recover after the introduction of the Surface Pro and the Surface Laptop.
But according to a report from DigiTimes, sales of Surface models keep going down, with Pegatron, the company in charge of manufacturing Surface units, reporting reduced orders.
The reason for Surface sales declining even more appears to be the strong competition from other vendors, as the 2-in-1 market has grown up to the point where customers can choose from a wide variety of devices, including alternatives to Microsoft’s own Surface models.
Apple and the iPad Pro stealing Microsoft’s users
One particular rival that offers devices positioned as direct rivals to Microsoft Surface is Apple, which unlike the Redmond-based software giant, is experiencing growing sales for its iPad Pro lineup. Apple has refreshed the iPad Pro range with the addition of a new 10.5-inch model last month, and there are already positive signs, with early orders revealing strong demand for this device.
Apple is a company that didn’t believe in the 2-in-1 market at first, with CEO Tim Cook himself playing down the Surface lineup and suggesting the Cupertino iPhone maker would never launch a similar device. But because of the success recorded by the Surface lineup, Apple had no other option than to adapt and launch its own 2-in-1 device, with the iPad Pro now a direct rival to the Surface.
On the other hand, Microsoft’s Surface is also seeing increased competition from other OEMs, with the largest companies, including Lenovo, ASUS, and Samsung, launching 2-in-1 devices competing against its own products. This is after all good news for Microsoft since the purpose was to expand the Windows device ecosystem, but the company still needs to find a way to keep Surface successful despite all of this.
Microsoft hopes the Surface Laptop would boost sales of the Surface lineup, and the company has high expectations in the upcoming back-to-school holiday shopping season as this device is primarily aimed at the education market.