Surface availability in the world - biased or unbiased?

[Chintan Gohel]

As per this blog post: https://blogs.windows.com/devices/2...day-markets-around-world/#CMSCA4hjqDvDVyme.97

and this one: https://blogs.windows.com/devices/2017/05/23/meet-new-surface-pro/#mMWP57i0Emb7LqFb.97

The surface pro will be available in these 24 markets:

1. Austria (Europe)
2. Australia
3. Belgium (Europe)
4. Canada - North America
5. China - Asia
6. Denmark (Europe)
7. Finland (Europe)
8. France (Europe)
9. Germany (Europe)
10. Hong Kong - Asia
11. Ireland (Europe)
12. Italy (Europe)
13. Luxembourg (Europe)
14. The Netherlands (Europe)
15. New Zealand
16. Norway (Europe)
17. Poland (Europe)
18. Portugal (Europe)
19. Spain (Europe)
20. Sweden (Europe)
21. Switzerland (Europe)
22. Taiwan- Asia
23. UK (Europe) - I mean the continent and not EU
24. USA -North America

So right off we can see this is not a real worldwide release as it is majorly catering to North America, Europe and part of Asia - conspicously missing are South American countries, African countries, and many Asian nations

So I got to thinking, is there some some logic or sense to all this? To the limited availability of Microsoft's best physical device to date?

I started some basic research

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Here's a list of the top 40 economies in the world as per GDP according to IMF:

USA, China, Japan, Germany, UK, France, India, Italy, Brazil, Canada, South Korea, Russia, Australia, Spain, Mexico, Indonesia, Turkey, Netherlands, Switzerland, Saudi Arabia, Argentina, Taiwan, Sweden, Poland, Belgium, Thailand, Nigeria, Austria, Iran, UAE, Norway, Egypt, Hong Kong, Israel, Denmark, Philippines, Singapore, Malaysia, South Africa and Ireland
​

Now notice that there are several prominent names in the above list that the surface isn't going to be launching in - I've highlighted them in bold and italics

So surprisingly these markets aren't getting the surface devices - even though economically it would have made sense - and countries like Luxembourg and New Zealand are on the list (possibly by virtue of them being next to country which is getting them)

---

Let's try another metric - population - the logic here is that a bigger population means a bigger potential market - so below is the list with the top 40 in terms of population

China, India, USA, Indonesia, Brazil, Pakistan, Nigeria, Bangladesh, Russia, Japan, Mexico, Ethiopia, Philippines, Egypt, Vietnam, Germany, DRC, Turkey, Iran, Thailand, France, UK, Italy, Tanzania, South Africa, Myanmar, South Korea, Colombia, Kenya, Spain, Argentina, Ukraine, Sudan, Uganda, Algeria, Poland, Iraq, Canada, Morocco and Saudi Arabia​

Again, some of the countries I highlighted earlier have appeared in this list as well

Now it seems troubling that the countries with a high level of GDP and a high level of population would be off the list of countries that the surface will be selling in. Why is the surface and by extension the other surface products not available in 4 out of 5 BRICS nations? Brazil, Russia, India and South Africa?

---

Let's try another metric to make sense of things - fastest economically growing nations
I'm going to exclude some countries since they are too small:

Ethiopia, Nepal, India, Philippines, China, Senegal, Tanzania, Iran, Vietnam, Kenya, Sri Lanka, Bangladesh, Myanmar, Rwanda, Mali, Malawi, Ireland, Indonesia, Pakistan, Uganda, Egypt, Algeria, Malaysia, Israel, Luxembourg​

Now at least we see why Luxembourg made it to the list - it's one of the fastest growing countries - though it's been beaten by more than 40 others

And again we find that some of the countries highlighted twice before have been highlighted here as well

So it seems folly to not sell the surface and help increase it's reach if it's not being sold in Brazil, India, Russia, Nigeria, South Africa, Malaysia, Philippines, South Korea and many others

---

Why would this be so?

• It can't be about targeting the rich countries - that doesn't explain why South Korea and Israel are off the list
• It can't be about shrinking economies as that doesn't explain why India and Brazil are off the list
• It can't be about stability of the country as South Africa and Malaysia are pretty stable

So what gives? Is this real bias or are we just looking at the start of world wide expansion and marketing?

sorry for the long post and sorry for any spelling/grammar mistakes

let's see some interesting comments below

 

[anon(50597)]

That's a great question and you've done a lot of research looking at particular metrics.
I don't begin to have a theory, but I'm sure there is research maybe only MS has that points to an answer. Maybe someone will have a good educated guess.

Sent from mTalk on my SP4

 

[Keeptechcoolandsimple]

i can't speak for other countries, but i notice japan and south korea are not on the list. i do remember hearing about these 2 countries a while back and about how it is particularly hard to break into these 2 markets because of a groupthink there where people are inclined to support their homegrown brands. not impossible - but definitely a lot harder.

so maybe im thinking msft is - at least temporarily - avoiding releasing in markets with unique challenges until a later time where it feels more suited to meet those challenges.

 

[Chintan Gohel]

i can't speak for other countries, but i notice japan and south korea are not on the list. i do remember hearing about these 2 countries a while back and about how it is particularly hard to break into these 2 markets because of a groupthink there where people are inclined to support their homegrown brands. not impossible - but definitely a lot harder.

so maybe im thinking msft is - at least temporarily - avoiding releasing in markets with unique challenges until a later time where it feels more suited to meet those challenges.

You have a point of MS not trying to enter difficult to enter markets

Brazil has a difficult currency exchange rate if I'm not mistaken and to a particular degree so does India - plus with India they have some high taxes and duties so that could also be a factor where the end selling price is quite higher than what you could get in USA or Germany

But then again, shouldn't MS find ways of getting around this issue? If other well known brands have a presence there, then why not the Surface brand?

 

[Rainar Angelo]

Coming from India, I'm barely seeing people having any awareness of the Surface lineup. For starters, they could reduce the insane pricing. However, the SP4 was on sale via Amazon but the service is a key issue. I think it would be wise if they could offer the same level of service as they did offer in the US.

 

[convergent]

This is obviously something important to you given the extensive research you did. What is the point... to try and figure out that there is some evil bias going on?

The answer is far simpler than that. Microsoft is a "for profit" organization so the reasons they chose the markets they did for initial availability I'm pretty confident had to do with sales projections vs. cost of supply chain/delivery/support/etc.. All companies do this, so no hidden conspiracy.

 

[Indistinguishable]

I think it's more about distribution channels for point of sale and support. GDP and population are something that companies look at when releasing products in markets. But for an item like the Surface, which is really more about invigorating the Windows market and creating new categories, it's not really about getting the device in the hands of the most people. It's more about making the product known.

Microsoft simply doesn't have the distribution channels in some countries that they do in others.

 

[anon(5327127)]

Business is biased. For the people that don't have the device, in their country, there's always eBay.

 

[Chintan Gohel]

Coming from India, I'm barely seeing people having any awareness of the Surface lineup. For starters, they could reduce the insane pricing. However, the SP4 was on sale via Amazon but the service is a key issue. I think it would be wise if they could offer the same level of service as they did offer in the US.

Well, I'm from Kenya and though I've seen one shop selling the surface pro 3/4, the prices were indeed insane as you put it. Our countries have high taxes and duties - for example there's a 25% customs duty, 16% VAT, other smaller levies, 50USD base fee called import declaration fee -all this brings a large overall total to the item cost.

Laptops do not attract the customs duty but the surface devices unfortunately aren't classified as laptops and hence attract the full fees

 

[Chintan Gohel]

This is obviously something important to you given the extensive research you did. What is the point... to try and figure out that there is some evil bias going on?

In a way, yes, I mean, it would always irritate me when the best and latest devices/features would be announced and then realise that my country the country I live in and will most likely continue living in will not be getting that

For example, when the lumia 1020 was announced, we were pretty excited here - we even had one person do a presentation in front of 300 students at our college

I was able to buy it when the prices dropped after a couple of months but the camera grip - that was just impossible to find anywhere. I must have searched over 40 stores looking for the camera grip - and yet the advertisements always had the picture of the camera grip on a side note

The answer is far simpler than that. Microsoft is a "for profit" organization so the reasons they chose the markets they did for initial availability I'm pretty confident had to do with sales projections vs. cost of supply chain/delivery/support/etc.. All companies do this, so no hidden conspiracy.

I would believe this if it wasn't for the fact the latest Samsung phones arrive here the same month as anywhere else in the world, the latest iphones also start selling here soon after launch, same with macbooks, with canon and Nikon cameras, with other gadgets like drones and tablets, fitness trackers and even books

By far I feel that Microsoft makes the least effort in making sure that their presence is felt in other countries -and this can be one of their biggest weaknesses if they don't correct it soon

 

[Chintan Gohel]

Microsoft simply doesn't have the distribution channels in some countries that they do in others

But then how is the lumia 950 being sold in my country as well as other countries but not be able to get surface devices? It wouldn't be that farfetched to use the same channels for selling phones to let them sell the surface lineup

And besides, didn't MS buy Nokia? Didn't that include the distribution network? Or am I mistaken here?

Business is biased. For the people that don't have the device, in their country, there's always eBay.

Not quite sure what you mean here - isn't ebay predominant in US and UK? Or does it operate everywhere?

 

[Indistinguishable]

But then how is the lumia 950 being sold in my country as well as other countries but not be able to get surface devices? It wouldn't be that farfetched to use the same channels for selling phones to let them sell the surface lineup
And besides, didn't MS buy Nokia? Didn't that include the distribution network? Or am I mistaken here?

I wasn't aware that the Lumia 950 was still being sold anywhere.

That said, mobile devices are a bit different as they're sold through wireless carriers.

 

[Chintan Gohel]

I wasn't aware that the Lumia 950 was still being sold anywhere.

That said, mobile devices are a bit different as they're sold through wireless carriers.

Not really, phones are sold as devices not tied to any other company or carrier unless the carrier themselves do it - I did buy my 1020 from a cellular carrier company but it was unlocked and it could accept any SIM card without issue

 

[tonygt92]

I am from India and the Surface Pro 4 was launched here. The price of the Pro 4 i5 8GB, the popular specification costs $1574 after adding the type cover, whereas you can get the same from MS store USA for $999 with a $100 dollar discount after the college students offer is added. I don't think anyone in their right mind would spend that much for a Surface Pro 4 i5 in India as you can get much better laptops for the money. The Surface Pro will also see a similar trend in pricing so there is no point in launching the device here. There might also be pending stocks of the Pro 4 here to be sold as well, so launching a newer device priced more or less similarly would further kill sales of the Pro 4.

 

[Chintan Gohel]

I am from India and the Surface Pro 4 was launched here. The price of the Pro 4 i5 8GB, the popular specification costs $1574 after adding the type cover, whereas you can get the same from MS store USA for $999 with a $100 dollar discount after the college students offer is added. I don't think anyone in their right mind would spend that much for a Surface Pro 4 i5 in India as you can get much better laptops for the money. The Surface Pro will also see a similar trend in pricing so there is no point in launching the device here. There might also be pending stocks of the Pro 4 here to be sold as well, so launching a newer device priced more or less similarly would further kill sales of the Pro 4.

The question I then ask is why the price so high in India? I'm not from India and I suspect it's because of high import taxes and duties but I would like it if you can confirm that

 

[toddpart]

Even if it is because of import taxes, duties, etc.....how is that MS's fault? They don't make tax law anywhere that I'm aware of. If you're suggesting that they should lower their price in order to counter the high tax rates, that is just not good business. It's especially not good when you want to maintain perceived value as a top tier luxury item. In my opinion, this is why the question of "well how can Samsung sell phones here," is not relevant. Phones are a commodity. Manufacturers are basically just looking to make money through sheer volume. So, if that means that in some markets their margin is thin or non-existent, so be it. I don't think MS is trying to play the volume game with Surface in any market. That's what their OEM's are for. If someone wants the premier MS Surface experience then they need to accept that they will have to pay for it.

 

[Chintan Gohel]

Even if it is because of import taxes, duties, etc.....how is that MS's fault? They don't make tax law anywhere that I'm aware of. If you're suggesting that they should lower their price in order to counter the high tax rates, that is just not good business. It's especially not good when you want to maintain perceived value as a top tier luxury item. In my opinion, this is why the question of "well how can Samsung sell phones here," is not relevant. Phones are a commodity. Manufacturers are basically just looking to make money through sheer volume. So, if that means that in some markets their margin is thin or non-existent, so be it. I don't think MS is trying to play the volume game with Surface in any market. That's what their OEM's are for. If someone wants the premier MS Surface experience then they need to accept that they will have to pay for it.

So from your point of view there's not much that Microsoft can do to make sure that the surface brand reaches a wider reach in the world. Others have said also that the surface brand isn't really to make sales and huge profits but to inspire other OEMs to reach new heights in engineering and design, in better technology and functionality

But your statement that those who want the surface experience will have to pay for it doesn't make sense since each individual will have to import it on their own - and people who import on their own end up paying a lot more than if they had bought it at a local shop

Case in point - I was browsing a local computer shop - they had a hp envy laptop going for an equivalent price of 1150 USD while the same model sold in the US was 1000USD, a difference of 150 USD

Now if I had decided to import the same model from USA, I would have paid about 1500 USD for it due to all the taxes and whatnot. The shop or dealer selling locally can sell the devices at a lower price then people individually importing it

 

[tonygt92]

Taxes and duties, unless the Surface is made in India, Microsoft can't price the device efficiently. And I don't think they want the surface to be a mass market device here as well, its a premium device, Microsoft has other bigger concerns here in India with their software being pirated and used widely, so they might be addressing that first as after all they are always a software company first.