Orders for Microsoft’s Surface devices, including the latest models, have been much smaller than the original expectations of Pegatron, the contract manufacturer which assembles them.
According to sources from the upstream supply chain cited in a DigiTimes report Tuesday, Pegatron Technology has seen weakening orders from clients recently.
Here’s an excerpt from the report:
Since demand for Microsoft’s Surface products has been seriously undermined by other first-tier vendors’ similar devices, the software giant has been conservative about placing its orders, which have been much lower than than Pegatron’s original expectations.
Pegatron also assembles iPhones alongside Apple’s longtime manufacturer Foxconn.
The Windows giant unveiled a fifth-generation Surface Pro tablet on March 27 alongside a new Modern Keyboard with a built-in fingerprint reader and other accessories. Among other features, the device has 13.5 hours of battery life, Intel’s seventh-generation Core processor code-named “Kaby Lake”, a new Alcantara keyboard, a next-generation Surface Pen and more.
The same Intel chip also powers, Microsoft’s $999 MacBook rival, dubbed Surface Laptop.
Speaking of which, DigiTimes says that Surface Laptop orders are unlikely to boost Pegatron’s revenues until later in the third quarter of 2017. Pegatron Vice Chairman Jason Cheng expects revenues in the second half of 2017 to at least stay flat year on year.
Microsoft is reportedly set to lay off thousands of sales staff around the world in the latest round of restructuring, TechCrunch said a few days ago. Bloomberg added that the redundancies would be “some of the most significant in the sales force in years.”