Microsoft made its new member of the Surface family, Surface Windows 8 Pro, available for sale starting February 9, 2013. The Surface Pro, as I would like to call it, is being sold via Microsoft’s online store, their few retail stores and Best Buy and Staples retail stores.
Within hours, news started rolling in of the 128GB model going “out of stock”. The 64GB was available in most places, but the higher-end model was showing no stock at most of the retailers.
What does it mean? Unfortunately, besides the simple math of demand being more than the supply, nothing. The supply was not enough to keep up with the demand, which for a robust manufacturing organization means a supply chain disaster. How can a company botch supply on launch day? It is the one day the company gets to be in the press more than any other day, at least from that product’s standpoint, and they are unable to fulfil demand.
However, despite their keyboards and mice, as well as their Xbox and now Surface RT, I don’t consider Microsoft a “robust manufacturing company”. Also, the Surface Pro is not a run-of-the-mill product, or an iteration of an existing product. It has a complex screen and specialized materials. There very well could be issues in larger scale manufacturing of those components. In fact, after promising that the Surface Pro would be released about 90 days after the Surface RT, Microsoft ended up releasing the former about 2 weeks later. That hints at a possible issue (or a set of issues) they may have faced during the manufacturing.
There were also anecdotes from individuals going to or calling retail stores in their area and finding out that the stock at these stores was in many cases in single digits. While those are still anecdotes, it is worthwhile to remember that the stock is ordered by the store, and not by Microsoft. Regardless, the customer experience ended up being bad because they could not buy the product they wanted to.
However, not all is lost as long as Microsoft can ramp up quickly. If they replenish stocks quick enough and take advantage of the momentum they have unexpectedly received, it may end up working in their favour. These enthusiastic customers will show off their shiny new toy to their friends and family and perhaps create a few more customers out of them.
Here is where Microsoft will have to learn what Apple has mastered — pre-production capital expenses to fulfil the demand expected at launch, accurately predicting launch day demand, and most importantly, making sure more markets are served at launch and soon after, than the previous launches.
In some ways, this situation is better than the opposite situation, which is Microsoft and its retail partners stock a ton of units and no one wants to buy them. At least at this point it does seem like there is unmet demand for the product. It is for Microsoft to ramp up and ensure that their next Surface family member has even better launch day balance between supply and demand.