Report: Microsoft Aiming To Sell 16 Million Windows Tablets This Holiday Season


Microsoft has set a goal of 16 million Windows 8 tablet sales this holiday season, and it's backing that up with a significant boost in Windows retail marketing spend, according to a report Friday from Microsoft blogger Paul Thurrott.

Microsoft is planning to spend $405 million on Windows retail marketing this fiscal year, a 68 percent increase from last year. This breaks down to $131 million for incentives and offers and $274 million for direct marketing and operating expenses, Thurrott reported.

A Microsoft spokesperson declined to comment on the report. But clearly, Microsoft is pumped up about the wide variety of Windows 8.1 devices headed to store shelves. "We are set up for a terrific holiday season," Microsoft CFO Amy Hood said during its first-quarter earnings call last week.

[Related: 10 Illuminating Points From Microsoft's Q1 Earnings]

The coming Windows 8.1 tablet blitz will include 8-inch models from Dell, Lenovo and Toshiba that cost less than $300. Nokia will be selling its Lumia 1520, a 6-inch Windows Phone 8.1 device that marks the future Microsoft subsidiary's entry into the "phablet" market, and its Lumia 2520 Windows RT 8.1 tablet.

Microsoft's own Surface tablets will be in the holiday mix, too. Microsoft has made "a lot of progress in sales execution on Surface," and first-quarter unit sales were more than double the previous quarter, Hood said last week.

The 16 million figure, if accurate, is ambitious to say the least. Apple, by way of comparison, sold 22.9 million iPads during last year's holiday quarter, and this week in Apple's fourth-quarter earnings, CEO Tim Cook said the new iPad Air and iPad are poised to sell well this holiday season.

"I think it's going to be an iPad Christmas. ... We are pretty confident," Cook said on the call.

With the new iPads, and a flood of new Android tablets, "consumers may be overwhelmed with options this holiday season," Douglas Grosfield, president and CEO of Xylotek Solutions, a Cambridge, Ontario-based Microsoft partner, told CRN.

No matter how many Windows 8 tablets Microsoft ends up selling, it'll surely be more than what it sold during last year's holiday quarter, which it didn't disclose, when only the Surface RT and a handful of Windows 8 tablets were on the market.

If Microsoft and its OEM partners manage to jump-start Windows tablet sales, that should have a carry-over effect on Windows 8 PC sales, Jon Bach, president of Puget Systems, a Kent, Wash.-based Microsoft system builder partner, said in an email.

"Windows 8 is strongest, by far, on a touchscreen," Bach told CRN. "It makes a lot of sense to me that people would adopt Windows 8 under that experience and then shift to it on the rest of their devices later as a result."

Andy Kretzer, director of sales and marketing at Bold Data Technology, a Fremont, Calif.-based system builder partner, said Microsoft's decision to let developers write Windows 8 apps in HTML, CSS and JavaScript could lead to a virtuous circle that increases market share.

"The more people who are able to consume apps and services written for this platform, the more apps and services will be developed for this platform," Kretzer said in an email. "The more apps available to businesses and consumers, coupled with the lower barrier to entry in app development, may result in a faster corporate upgrade cycle."

PUBLISHED NOV. 1, 2013