Microsoft's Surface Faces Huge Headwinds

Microsoft Corp. (NASDAQ: MSFT) needs to build and sell its Surface tablet to "hedge against a declining PC market," a reporter from ZDNet writes. The problem is that even if the Surface does well, sales will be dwarfed by those of other tablets from firms led by Apple Inc. (NASDAQ: AAPL) and Samsung, and PC firms led by Lenovo, Hewlett-Packard Co. (NYSE: HPQ) and Dell Inc. (NASDAQ: DELL).

Nevertheless, ZDNet points to a research note by Morgan Stanley analyst Adam Holt as proof of Microsoft's resolve:

Holt is expecting Microsoft's Surface along with an army of tablet partners can give it 14 percent of the tablet market in 2013, up from 4 percent in 2012.

Fourteen percent will not get the job done.

Douglas A. McIntyre