Latest Tablet Shipment Report Shows Microsoft Corporation (MSFT) Needs Help

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The research firm Canalys released a report this week on fourth-quarter 2012 tablet shipments, and so far things don’t look too good for Microsoft Corporation (NASDAQ:MSFT)‘s Surface tablet. It’s the company’s first step into the tablet world, and Microsoft is learning that selling devices isn’t as easy as having the latest product on the market.

Tablets gaining ground, mostly
The Canalys report says that worldwide shipment of PCs (including tablets) increased 12% year over year, with a total of 134 million units shipped in Q4 2012. Out of that number about one-third were tablets, which saw a year-over-year increase in shipments by 75%.

This should be good news for all tablet makers, but Microsoft Corporation (NASDAQ:MSFT) shouldn’t be too excited. As you can see from the graph below, the company is trailing significantly behind Apple Inc. (NASDAQ:AAPL) iPads and Google Inc (NASDAQ:GOOG)‘s Android tablets.

Source: Canalys.

The fourth quarter of 2012 was the first time Apple didn’t scoop up more than 50% of tablet shipments, but the company still leads the pack nonetheless. Estimates for actual sales of Surface tablets are expected to be around 700,000. For comparison’s sake, Apple sold a record 22.9 million iPads in its most recent quarter. But low shipments and sales aren’t the only problem for Microsoft Corporation (NASDAQ:MSFT). The company also had a “very high” return rate on Surface tablets, according to an analyst at IHS Inc. (NYSE:IHS) iSuppli. But it’s important to remember that new product launches aren’t going to enjoy the same numbers as established products like the iPad do, and even, Inc. (NASDAQ:AMZN)‘s Kindle Fire had reports of high return rates after its initial launched.

Source: Microsoft. Surface Pro shown.

One contributing factor to low Surface sales was the fact that Microsoft Corporation (NASDAQ:MSFT) chose to initially launch the tablets in its retail stores. With about 50 stores currently open, the company doesn’t have many touchpoints with consumers. With the launch of the new Surface Pro set for this Saturday, Microsoft and its investors hope the new version of the tablet will bring higher sales numbers. The Pro offers a full version of Windows 8, which will run PC programs like Photoshop and Microsoft Office, comes with up to 128 GB of storage, and has sharper screen. The Surface Pro can be had for $899, but as fellow Fool Evan Niu points out, storage space on the new Pro may be much less than Microsoft Corporation (NASDAQ:MSFT) is advertising.

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