Microsoft Surface Sales are Taking Off

Microsoft MSFT CEO Steve Ballmer told French daily Le Parisien that sales of the company's first tablet "are starting modestly." Ballmer also said that the supply shortages were a "good sign." He added that Microsoft will "fix this problem quickly" as the company increases capacity, which is part of its overall strategy. In July, Ballmer said that Microsoft's goal was to sell a few million units in the next 12 months. His latest comments indicate that Microsoft will be able to meet that goal. No specific sales figures were provided. But USA Today might have some additional insight into how the tablet space is evolving. According to the publication, Apple's AAPL market share has dropped to 50 percent. This is a far cry from the more than 60 percent market share that the company commanded in 2011. Samsung, which was scraping by last year with only 6.5 percent of the tablet market, is now a growing contender with 18.4 percent. Worldwide, Nexus 7 sales are approaching one million units per month. Domestically, Amazon AMZN acquired 22 percent of the tablet market after releasing the original Kindle Fire. This shows that while Apple has sold the most tablets (more than 100 million iPads worldwide), consumers are interested in lower-cost alternatives. Surface RT is not a low-cost alternative, however. It is essentially the baby brother of a fully-featured tablet PC that Microsoft plans to release next year. At $499 for the 32GB model, the device provides a little more value than most competing tablets. But iPad users have access to the App Store, which contains hundreds of thousands of apps. This gives Apple a distinct advantage, as evidenced by sales of the company's latest tablets. The iPad Mini and iPad 4 sold a combined total of three million units during their first weekend of release. In addition to its first tablet, Microsoft is celebrating the worldwide launch of Windows 8 and Windows Phone 8. Earlier this month, Ballmer told reporters about his expectations for its mobile platform. "With the work we have done with Nokia, HTC, Samsung and others ... there is now an opportunity to create really a strong third participant in the smartphone market," he said. "We are still relatively small ... I expect the volumes on Windows Phone to really ramp quickly." Follow me @LouisBedigianBZ