Talk about scratching the Surface. Microsoft CEO Steve Ballmer inadvertently dinged his company’s launch campaign for its Surface tablet by telling France’s Le Parisian in an interview that sales are “starting modestly.” To be fair, he added that critics’ response to the device was “phenomenal” — and that initial sales were limited because the tablet is still just available online and at a few stores. Still, his tempered comment, along with his refusal to project potential sales, contributed to a 2% drop in Microsoft’s stock price this afternoon. The company has a lot riding on the tablet, which includes Microsoft Office programs and can be paired with a keyboard cover to function like a conventional laptop computer. Strong sales “would come as a positive surprise to investors and demonstrate [Microsoft’s] relevance in this important market,” Cowen & Co analyst Gregg Moskowitz says today. He projected that tablets including the Surface that run Microsoft’s Windows 8 software will account for 11% of tablet sales over the next 18 months, ahead of the the Google Nexus (at 9%) but behind the large-screen Apple iPad (25%), Amazon’s Kindle Fire (24%), the iPad Mini (18%) and other Android tablets (12%).
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