One of the biggest things that came out of Microsoft’s Q3-2017 earnings call earlier today was that Surface device sales dropped 26 percent year-over-year. That means the Surface Pro and other products sold 1 less unit out of every 4 sold between January 1 and March 31, 2017, compared to the same period in 2016.
We can easily zero in on why that was the case. One reason, as Microsoft pointed out during the earnings call, was that the 2-in-1 hybrid tablet market has more competition this year than it did in 2016.
SEE: Surface Devices Sales Dip Accounts for Microsoft Stock Hit, Not Surprisingly
That’s true. We have products like the Asus ZenBook Flip UX360, the Samsung Notebook 7 Spin, the HP Spectre x360 and so on, all essentially vying for the same market. Moreover, data from IDC shows that the market for tablets and hybrids has been on a decline, and will only rebound in 2018.
But there’s another reason why Surface sales could have dipped in Q3-2017 for Microsoft – expectations around the release of Surface Pro 5. Even though Surface Pro 4 was being sold at discounted prices through the third quarter (first calendar quarter, Jan to March), it doesn’t seem to have helped Surface sales for the quarter.
Surface Book with Performance Base (with 6th generation Core i7 processors from Intel) sales don’t seem to have been able to lift overall Surface product sales this past quarter, either, not did any realized revenues from Surface Studio pre-orders.
Surface Pro 5 Has to Come Now
And that’s why it is critical that Microsoft push the Surface Pro 5 out as soon as it can. As far as we know, there were only two impediments for its release:
One was Windows 10 Creators Update, which launched on April 11 to the public but was likely made available to OEMs prior to that.
The other was Intel’s Kaby Lake processors, which Microsoft would have needed for the Surface Pro 5. That product is out as well, and is already powering several devices, as you can see from these lists published on UltraBookReview.
Now that these two hurdles are out of the way, the new Surface Pro 2-in-1 hybrid tablet from Microsoft is officially long overdue, and we still have little visibility on a firm Surface Pro 5 release date.
On the other hand, October has generally been the time for Surface products to be launched. Will we have to wait until then? I hope not, because Microsoft could take two more quarterly hits on Surface skills if that’s the case.
Even the much talked about “Edu Cloud” Windows 10 Cloud device that’s rumored to be launched at the company’s May 2 event might not save that.
What the market needs – as does Microsoft – is a hard, firm Surface Pro 5 release date, and they need it now.
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