Perspectives

Channelnomics Original

The Microsoft Surface Duo

Next Problem: Delayed Product Launches

April 9, 2020

Microsoft is delaying the launch of its Surface Duo and Neo devices, potentially signaling a trend to come due to the COVID-19 pandemic

The latest casualty of the COVID-19 pandemic is the Microsoft Surface Duo and Surface Neo. Microsoft announced it’s delaying the launch of these new devices, originally intended for the holiday shopping season, to focus on other products. Instead, Microsoft says it’s focusing efforts and capacity on the development of the Windows 10X operating system.

The new Surface device delay, though, could signal a larger problem due to the COVID-19 pandemic that has yet to present itself: supply-chain disruption and inventory shortages.

Vendors, distributors, and solution providers reported a surge in sales of endpoint devices (PCs, Chromebooks, tablets), monitors and displays, headsets, and accessories as businesses around the world race to shift from traditional office operations to work-from-home.

Enterprises, too, raced to buy networking, security, and collaboration products. Businesses were caught somewhat off guard by capacity and security issues related to having the bulk of their workforces outside their corporate perimeters.

Distributors say the surge was like watching their inventory melt off, leaving their warehouses bare.

The supply-chain disruptions are multifaceted.

> Factories in China and other parts of Asia stopped producing and continue to operate at limited capacity.
> Components made in the U.S. are now trickling out of the country due to fallowed factories and reprioritized production.
> Logistics capacity is sapped because of priority given to medical supplies and food stocks.

Solution providers say they’re having a hard time getting what was previously commodity gear. Some solution providers say they have weeks-long back-order wait times for personal computers and wireless gear.

In a survey conducted by The 2112 Group, which publishes Channelnomics, 44% of solution providers said supply-chain disruptions are the biggest immediate impact of the COVID-19 pandemic challenging their businesses. In a parallel 2112 survey of channel chiefs, only 18% said they had supply-chain disruptions.

Some of the supply-chain disruptions are caused by redirecting products to critical services. By government mandate, healthcare providers and critical infrastructure are getting top priority for goods and services.

There’s growing speculation, however, that the supply-chain disruptions, which first started hitting the IT industry in early February, could have a ripple effect throughout the year as the production of components and finished goods recovers from the pandemic’s containment measures. The result: fewer new products coming out in 2020.

2112 COVID-19 Research
> COVID-19 Pandemic Impact on Channel Partners
> COVID-19 Impact on the Channel