Report: Microsoft Could Sell 30,000 Surface Studios

Posted on December 28, 2016 by Paul Thurrott in Microsoft Surface with 29 Comments

Report: Microsoft Could Sell 30,000 Surface Studios

A Digitimes report states that sales of Microsoft’s stratospherically-priced Surface Studio PCs are better than expected.

Of course, this needs to be put in context: Digitimes is notoriously hit or miss. And the publication originally estimated that Microsoft would sell 15,000 Surface Studio units during the fourth quarter of 2016. Now, they are revising that estimate to 30,000 orders, which is double the original estimate, yes, but doesn’t mean that Microsoft will actually be able to ship that number of devices. (Remember that Microsoft said supply would be constrained for quite some time.)

“Microsoft has ordered 30,000 units to be shipped in the first quarter of 2017, according to Taiwan-based supply chain makers,” the report notes.

While the language is a bit fuzzy, the way I read this report is that Digitimes believes Microsoft took orders of 30,000 units in 2016, and expects to ship that number to customers in the first quarter of 2017.

Doing the math—the mid-level Surface Studio costs $3500—this would work out to about $105 million in revenues for the initial run. But it’s unlikely that Microsoft will sustain this level of sales over the next year, given the pricing: This initial batch almost certainly represents the majority of sales it will see in 2017. Barring massive price cuts, of course.

I recently wrote about why I believe Microsoft is forced to price its Surface devices so highly, but I continue to be amazed by the ongoing comparisons of Microsoft’s recent designs—mostly positive—to that of Apple’s new MacBook Pro, which has been rightfully panned here, there, and everywhere.

To be clear, Surface Studio and the new MacBook Pro have absolutely nothing to do with each other, beyond the most tenuous of connections: They are both expensive hardware products that were announced at about the same time. But for all the complaining around the MacBook Pro, let’s be serious: You know Apple is going to sell many more units than Microsoft will of Surface Studio. And if only to shut up the critics, I suspect you will hear Apple talk about the blockbuster start this product has had in its next earnings call.

Anyway, it doesn’t matter. These products are completely unrelated.

The real battle, as I see it, comes in the Spring, when Microsoft announces what I hope/pray are USB-C/Thunderbolt 3-based new generation Surface portables, which we assume will be called Surface Pro 5 and Surface Book 2. If Apple hasn’t righted its MacBook Pro lineup by then, all bets are off. Today? Not so much.

 

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Comments (30)

30 responses to “Report: Microsoft Could Sell 30,000 Surface Studios”

  1. 5411

    Paul you do not seem to have a grasp on the working world. $3000 or $4000 for a tool one makes a living with is just the cost of getting work done, and that’s what tens, hundreds of thousands of graphic artists, musicians, producers, artists, modelers, engineers, city planers, the list can go on and on. Bit disappointed in your thinking that it was more than a writer as yourself needed, hence very few others would.

    My neighbor is not a rich man but he just bought a used super B log trailer for $65000 to get work done and a pay check.

    • 1377

      In reply to rortech:

      Getting picky, design engineers may have some use for Surface Studio, but they may have greater need for multiple monitors, and multiple monitor setups are often more efficient if all the monitors have similar display specs.

      Surface Studio may be ideal for people who do artistic or design work on a single screen.

  2. 5592

    Not sure why the Surface Studio is "stratospherically-priced" while the MacBook Pro is merely "expensive".

    Comparing:

    Microsoft Surface Studio
    Core i7
    NVIDIA GPU w/2GB RAM
    16GB RAM
    1TB Storage
    28" PixelSense Display
    $3,499.00

    Versus

    Apple MacBook Pro
    Core i7
    Radeon GPU w/2GB RAM
    16GB RAM
    1TB Storage
    $3,199.00

    Apple Endorsed LG 27" UltraFine 5K Display
    $974.00

    And that leaves the Apple configuration without touch or pen input and has a total price of $4,173 direct from Apple.

    Replacing the Apple endorsed LG display for a Wacom Cintiq 27QHD touch (currently on sale at the Wacom site for 2,549.95) raises the price to $5,748.95

    Now, granted the configurations aren't identical nor the top nor bottom of the line in either product line (for example, the Surface Studio can be had with 32GB of RAM unlike the MacBook Pro and both can be had with higher end GPUs) but this seems a roughly similar configuration. And clearly there's a difference in some cases where portability will be a deciding factor although many MacBook Pro users treat the laptop as a computing system for external monitor permanent systems. Both are, however, marketed as high-end systems designed for graphic arts professionals.

     

    • 3025

      In reply to MikeGalos:

      I agree with your point. However, since day 1 Paul has consistently made a snide pricing remark every time Studio is mentioned, no matter what the venue or media. I certainly wish this computer cost less or was more modular, but the nice thing about the PC ecosystem is that there are options at all price levels, and Microsoft doesn't have to offer a lower-priced PC since there are plenty of others out there. Apple's ecosystem, on the other hand, gives very few options for lower prices.

    • 6672

      In reply to MikeGalos:

      I'll suggest everyone experiencing uncontrollable Studio geargasms simply buy one of these:

      http://www.dell.com/en-us/shop/productdetails/inspiron-24-7459-aio/fddop717b

      for $849 and wait for Studio revs 2,3 and the clones to arrive. Paul is correct that these aren't meant to make financial sense, but are aspirational. And not in the way a Swatch was--these have to cost too much. When the clones do finally arrive, the Studio 5 tilty-screen will be hovering on a magnetic field, making the chaise-lounge goal-post configuration seem so 2016. And the lust-cycle will continue......

    • 9562

      In reply to MikeGalos:

      $3500 and its got the ugly chrome arms and square base of a 1960's table lamp.

  3. 2099

    I played with one of these at my Microsoft store and I am in LOVE! This was freaking awesome. The puck not as awesome but still pretty cool. 

    I'd get one (if I needed it) but I still prefer to not be tethered to my desk.

  4. 4964

    Given the Studio is in very limited release and not available at all yet in many markets I think your sales projections are rather conservative. Get over the price thing! For the intended market it is 'affordable'

  5. 661

    are there any sales figures for Wacom Cintiq to get a feel for the size of the market this is addressing? 

  6. 5234

    I don't see how this is much different than a small form-factor PC with a Wacom screen attached.  Except that you can't really upgrade this.

    Why didn't they make this modular??!

    • 1995

      In reply to Waethorn: That's what Dell, HP, Lenovo, Acer, Asus, etc are going to do. In 2 years, a poor boy like me will have a Surface Studio clone.

       

    • 3098

      In reply to Waethorn:

      Sadly, new MS doesn't seem to be a big fan of modular. See Surface Book Performance base. In my eyes it would be awesome if they would actually make use of the already partially modular design of their products and make it a core principle of them. The only Thing you can do now is buying a new Surface Pro Keyboard cover.

       

      But extending this "modular buy" to Book, Studio and even Project Scorpio would be a real differentiator in the market.

  7. 1043

    For any professional spending $3,500+ on a computer for work is a no-brainer. It is not something they are buying every year, it is an investment to improve workflow. Buy it, write it off on taxes, profit. They're not reviewers that need the latest every year to write/talk about, they need something that makes the software they use easier and/or more consistent in output. The time savings in workflow will easily recoup the cost. It's not just digital artists that can use such a device, but marketers, photographers, designers, the list goes on. There are many professions that rely on digital creation tools.

    • 5101

      In reply to Patrick3D:

       

      Agreed, but I don't understand why it's so underpowered for the target market. 8 gigs RAM max, no (true) SSD, weak & old CPU/gpu... The target customers would absolutely pay more to get this performance, and who cares if the box has to be slightly bigger?

       

      Still, I guess it's doing well enough!

      • 381

        In reply to evancox10:

        Looking at the tech specs page for the product you can get it with up to 32 GB memory. As for disk, I do agree that a pure SSD solution would be nice, but I'm not sure what the performance impact really is for the kind of creative work, where I'd imagine a lot of the data you work with is written sequentially with less random read/write operations. 

      • 5027

        In reply to evancox10: - Well Microsoft don't want to sell hardware in masses, that is not their business really.  They want to create new categories, inspire and motivate partners (OEMs'), display/show off what their software and services can do, create interest and hype about new possibilities for end consumers
        and so far Mission accomplished I would say :) 
        Price is not high at all, it is perfect for the intended market of such devices, but in the end I don't think Microsoft want to be selling to many devices to this market, they want partners to do that.  Better SSD and more RAM would definitely be nice, but to show of future possibilities, it seems the Surface Studio is doing just fine at the moment with what it's got, and it also motivate OEM's to make something more powerful to beat it.:) 
  8. 4964

    While not upgrade-able I think the form factor offers some hope of higher powered models. Having the CPU, Memory and storage separate from the screen itself surely makes different hardware offers more feasible. I'm looking for a refresh to offer more in much the same way as the performance bases have with Book 

  9. 6088

    I fully expect Surface Studio sales to eventually exceed 300,000. This is the amount of sales needed to generate $1 billion in revenue. It won't happen in 2017 but likely in 2018. Creative design shops of all types will need systems like this to help maximize productivity.

     

  10. 214

    Extremely good analysis.

  11. 639

    "The real battle, as I see it, comes in the Spring, when Microsoft announces what I hope/pray are USB-C/Thunderbolt 3-based new generation Surface portables, which we assume will be called Surface Pro 5 and Surface Book 2."

    Yes please!

  12. 8729

    The reason that Microsoft won't sell standalone Surface monitor as an accessory is that Microsoft wants to sell that idea of what a PC should be like much more so than selling the hardware.

    • 9631

      In reply to illegaloperation: Your point makes sense of course, they want to change the conversation on what PCs are.
      They could do it with the surface studio being usable as a screen easily though, by stating minimum system recommendations for the computer one uses it with and yeah, in general also the point that everyone will be looking at that kickass display and it's functionality, not the box connected to it under the desk.
      But yeah, if they don't allow using it as external display for windows 10 pcs, then yes, they have to offer highest end desktop spec options for it.
      MS has a major in right now regarding computers since they basically allow everything Apple does not, in windows land there are the most forward thinking designs with cool convertibles, full touchscreens with pen support, and highest end gaming and general graphics performance pushing setups, too and now the most forward looking all in one, but that one sadly not with the best internal specs options.
      If they offer it with the best specs options, it would completely change the conversation on pcs, the conversation would shift to: If you want the ultimate computer, get a surface studio, no way around it.
      Right now it is this is an awesome device for designers but watch out if you need/want high end specs, then this is no good choice right now.
      The criticisms against the macs deservedly got way louder this year as more and more mac users realize  with the latest macbook pro downgrade now there is no single good mac left for them anymore and the entire mac lineup has gone to shit.
      Not offering nice convertibles, not offering all in ones with touchscreen and pen support, not offering laptops and desktops with current state of the art internal specs.
      See, a big part of the moaning is that for the macbook pros there are no highest end spec options actually high end by today's standards.
      (Another big part of the moaning is no touchscreen with pen support and instead gimmicky crap touchbar and also none of the commonly used peripheral ports)
      MS and other windows manufacturers can take it from there and offer everything people want which Apple does not offer and those who offer the best total package in each category and on top highest spec options for those who want it will have great chances there.

       

  13. 9631

    The Surface Studio is not "stratospherically-priced" for what it is. You have to consider it is basically very comparable to a large Wacom Cintiq with on top a full computer (next to various nice features and a great unique form factor the Wacom lacks).

    Sure i'd love it too if it was lower priced, but yeah, when you take into consideration what it is and how much other devices with such functionality cost, it is still quite reasonable.

     

    I'm also quite glad if it does well for them, i feel like it is an excellent device for their first attempt at such a device and i hope they continue this line and push it further and further, good sales numbers can only help there.

     

    All that said, sadly the first version is not for me yet. I bought a Wacom Cintiq for work a few years ago and am very teased by this device but they'd have to address one of two things (ideally both) to make me buy it:

    1.: Add real highest end consumer grade hardware specs options. I want the most and fastest ram, the biggest fastest ssd and the best desktop class graphics card (right now a 1080). If the base has to be bigger or longer for that, so be it, i'm totally cool with that.

    And i'm sure many see it like me: This is a prestigious device most targeted at professionals among which likely many would like to buy the highest end spec options when already investing this much to have the slickest best device out there. Allow me to make it the ultimate desktop computer/all in one with highest end spec options.

     

    2.: Allow to use it as external display for other computers (while when used with a windows 10 computer it could still allow using all that custom nice surface studio functionality).

    This would both help against the issues of the (for my view too low) current internal specs and also add much perceived value to the product since one knows even if one buys the highest end spec options (once those are higher), they would still be outdated (for professional usage in some fields) within a few years. But if one can use it as external display (too) then this would way more count as longtime usable investment and would likely make it much more attractive to many studios.

    One could of course also consider offering a model then which doesn't have the computer guts at all (or stripped down to the bare minimum needed to retain the surface special functionality when used together with another windows 10 computer).

    They could state minimum recommended requirements for the computer they recommend using with it to have full surface studio functionality.

     

    I very much hope MS delivers on 1; and 2 would be very cool to have too, then i'm totally in for buying that iteration and i'm sure way way more others, too.

     

  14. 8579

    Digitimes is a Quija Board of IT Industry information and predictions.

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