Thoughts on Tech – Slow Surface Sales & RIM Rebounds

Surface

I mentioned in my last Thoughts on Tech that I didn’t think that Microsoft’s Surface tablet would be a success mainly due to its use of an operating system that tries to be the jack of all trades and master of none as well as the inherent difficulty in prying people off of their existing iOS and Android devices. About two weeks after Surface went on sale, Microsoft CEO Steve Ballmer was quoted in an interview¹ stating that sales had a “modest start”. He followed up by mentioning that a more powerful, more fully-featured Surface was on the way. I was extremely surprised at this for two reasons. First, you would expect a CEO to use marketing speak and business jargon to explain away any hint that a product is not selling well. If the CEO says that sales are slow, what is a customer to think? Second, by immediately following up with “but there is a better one on the way”, you are admitting that the existing product isn’t that good.

This was a very surprising comment even from Ballmer, but Microsoft later corrected the story stating that the word “modest” was used in reference to Microsoft’s product ramp-up strategy for Surface, not its sales. So what he was really saying was that Microsoft was taking a slow approach to manufacturing the tablet, possibly because it doesn’t think it will sell well? Hmmm. My guess is that Surface isn’t selling phenomenally since Microsoft has not released any sales numbers yet. There obviously isn’t anything to brag about. I wouldn’t be surprised if this version of Surface is off the market by May.

RIM the “Comeback Kid” of 2013

RIM, the company behind the BlackBerry, has been in a bad state since the 2007 release of the iPhone and the rise of touch screen smart phones. After a series of failed smart phones and tablets it has lost a huge amount of market share (even in the corporate sector), has suffered quarter after quarter of losses, and has ousted its longtime co-CEOs. The company has been hinging its comeback on BlackBerry 10 which is an entirely new platform built from the ground up for touch screen devices. After some delays, BlackBerry 10 will be released to the world in January 2013 and analysts have started to bet positively on the company. Citing “early strong reviews” of the platform, analysts are betting that RIM will be able to solidify its existing base. That may be true, but I don’t expect it to gain back any market share. It may be able to get its existing customers to upgrade, but I don’t think that any of the features of the platform are unique-enough to pull users from other platforms. Some analysts think that shares might be worth as much as $43 by the end of 2013 (up from $12 today). I wouldn’t bet your retirement on it.

¹Look at the photo that they used in that article. That is their CEO! He looks like a fresh plucked Thanksgiving turkey with a hangover. What a horrible picture with his droopy eyes and gaping mouth. He just looks like he doesn’t get it.