Microsoft Corporation (MSFT): ‘Modest’ Surface Orders

Microsoft Corporation (NASDAQ:MSFT) has moved itself into the tablet space in the last couple weeks with the launch of the Surface tablet, to compete with Nexus by Google Inc (NASDAQ:GOOG), the iPad by Apple Inc (NASDAQ:AAPL) and the Kindle Fire by Amazon.com Inc (NASDAQ:AMZN) – not to mention the partnerships Microsoft has with companies like Samsung, LG, Lenovo, Acer and others who make tablets that run the new Windows 8 operating system.

Microsoft Corporation (MSFT) Giving Apple Inc. (AAPL) a Run for its ‘Patent Money’

But while companies like tablet market leader Apple, Microsoft (MSFT) seems to be perfectly happy with its “modest” production numbers. While Microsoft won’t mention their sales numbers publicly – those may be spared until the quarterly earnings report – one report tried to make an educated guess as to how many Surface sales would be considered “modest” – especially when CEO Steve Ballmer says the reception to the new tablet has been “fantastic.”

By looking into some clues from other sources, a Web site report is making the educated guess that Microsoft Corporation (NASDAQ:MSFT) had ordered about 2 million Surface tablets. This information come from the CEO of Pegatron, who said his company was producing about 8 million tablets this quarter, with “the bulk” of them being iPads and Surface tablets. Based on the estimate that Apple (AAPL) will sell 5 million iPads this quarter and the estimate is that Microsoft Corporation (MSFT) will produce 2 million Surfaces.

But comparing that to Apple Inc (AAPL) is a bit misleading. The very first point is by operating system. The Surface is one of several devices in the market that run on the Windows 8 OS, while Apple is the only company that produces tablets than run its own iOS. So does “modest” mean the 2 million Surfaces will be sold, or is there a different number? With the market of tablets out there and the number of competitor companies, do you think 2 million is a modest number of Surfaces? Is it a good number to be worth investing in? How would you see the number if you were in the shoes of billionaire fund manager Seth Klarman of Baupost Group?

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