Why Surface sales numbers don't matter that much

Nadella:

We're not interested in competing with our OEMs when it comes to hardware. In fact, our goal is to create new categories and spark new demand for our entire ecosystem. That's what inspires us and motivates us with what we're doing in our devices and hardware.

We want to build experiences that bring together all the capabilities of our company.

They have been saying this since 2012. The original Surface was meant to be a kick in the pants to Windows OEMs to built better hardware, and whether related or not, the second wave of Windows 8 devices delivered after a poor first wave.

Surface is meant to:

1. Spark innovation among Windows OEMs

2. Showcase the new Windows OS (with touch and traditional inputs) and ecosystem

3. Foster demand for new form factors and the Windows ecosystem

I think they've succeeded with 1 and 2. Number 3 is a work in progress. On the hardware side judging by the good reception of devices like the Lenovo Yoga and SP3 I'd say they're on track. With the SP3 Microsoft managed to squeeze an Intel Core machine in a size nobody before them had been able to achieve, so imagine the next wave of Broadwell devices... the arguments against a hybrid device are getting more and more difficult to come by. On the software and ecosystem side their "3 screens" vision is converging (and will do so even more after universal apps, Surface mini and Threshold) and Windows 8.1.1 is assuaging criticism.

Look, Microsoft is not Apple and doesn't follow the same business model, not even close. Apple's whole livelihood depends on moving massive numbers iPads and iPhones every quarter. The $900M Surface write-up didn't exactly derail Microsoft, and the $45M Surface-related loss they experienced last quarter is a mosquito bite for a company in their financial position and diversity. So Surface is not going anywhere, no matter the tech bloggers or tech blog users and their "Surface is doomed" comments. So chillax. Enjoy the ride and innovation (or get mad like some of you have). Hey I'm not saying sales numbers don't matter at all, just that they it's a narrow view when it comes to these products and we shouldn't dwell on it. (Think of Surface as Google and their Nexus line [not exactly gangbusters compared to the Samsung brethren], or their many hardware projects designed to spark Google ecosystem adoption.)

And there is always that ace in the sleeve that Surface has that no iPad or Chromebook can fully match: enterprise (Microsoft's stronghold):

http://blog.surface.com/2014/05/businesses-are-committed-to-surface-pro-3/

http://www.anthro.com/products/surface-pro-charging-cart#.U4dxMY1lQkC