Microsoft scratching the Surface with sales

Microsoft Corp is said to have sold about 1.5 million Surface devices, a slow start in its bid to crack the fast-growing tablet market to make up for slumping personal-computer demand.

Microsoft has sold little more than a million of the Surface RT version and about 400,000 Surface Pros since their debuts, according to insiders.

The company had ordered about 3 million Surface RTs, they said. Brent Thill, an analyst at UBS AG, had initially projected Microsoft would sell 2 million Surface RT devices in the December quarter alone.

The poor reception for Surface, unveiled last year, adds to challenges facing Microsoft's Windows unit, which brings in a quarter of the company's revenue.

The devices are Microsoft's first direct attempt to grab a slice of the surging market for tablets, seeking to take on Google Inc and Apple Inc and prove that Windows has a place in a world of touch screens and smartphone applications.

That hasn't happened so far, said Alex Gauna, an analyst at JMP Securities LLC in San Francisco.

"It's pretty clear that things were bad entering the year, and at least for the moment they're getting worse," Gauna said.

"The path to a successful Surface, in the same way that they were successful with Xbox, is not very clear to me right now."

Catherine Brooker, a spokeswoman for Microsoft, declined to comment on Surface sales.

More expensive

Apple Inc sold 22.9 million iPads in the quarter that ended in December. Worldwide tablet shipments reached 128.3 million units in 2012, according to IDC, with Apple's iPad accounting for 51 percent of the market.

Microsoft's Surface RT, its first computer hardware product, went on sale on October 26. The more expensive Surface Pro, which is built on an Intel Corp computer chip and can run older PC software, arrived last month.

While Microsoft's newest version of its operating system, Windows 8, runs on PCs and tablets from other computer makers, the company decided to gamble on tablets itself, trying to emulate Apple's and Google's strategy of delivering their own flagship devices.