Microsoft rumored to cease Surface tablet business
Monica Chen, Taipei; Joseph Tsai, DIGITIMES [Thursday 9 October 2014]

Microsoft continues to see weak sales for its Surface Pro 3 tablet and is reportedly planning to cancel the product line since shipment performance has been far lower than expectations, according to sources from the upstream supply chain.

Lacking a sufficient number of distribution partners, plus high prices, the first- and second-generation Surface tablets are estimated to have created losses of about US$1.7 billion, the sources noted.

Seeing large-size smartphones impacting tablet demand, the sources are concerned about upcoming demand for the Surface Pro 3.

With the factors above, the sources believe sales of the Surface Pro 3 are unlikely to surpass one million units, adding that Microsoft is also not very aggressive about development of a next-generation Surface and is likely to terminate the product line.

Microsoft has been having difficulties entering the hardware business. The company’s Zune and Zune Marketplace, both failed to achieve results.

The company’s Windows Phone-based smartphones continue to suffer from weak market share and its Xbox One is also seeing weaker demand than Sony’s PlayStation 4.

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