On October 30, Microsoft launched Microsoft Band, its first smart wristband, which comes with a microphone for access to Microsoft's Cortana digital assistant along with a variety of fitness and notification features.
The $US199.99 Band sold out within two weeks. This past Tuesday, the online Microsoft Store had it back in stock -- only to sell out again a few hours later. It remained out of stock on Friday with no word on when it might return.
Microsoft has now offered few insights, saying only that the company is "excited by the response we have seen to Microsoft Band" and that it has sold "well beyond the numbers suggested to date." A spokeswoman added that Microsoft will continue to replenish inventory throughout the holiday season.
The shortages left would-be buyers scratching their heads and raised complaints that Microsoft only had a limited number to sell in the first place.
Why would the company offer up the Band if it were unprepared for potential sales? Because its overall corporate strategy is now aimed more at software analytics and Cloud services than hardware. That's true not just for wearables, but for tablets and other products, too.
That's markedly different from the Apple approach, which is closely tied to the company's hardware offerings, said Carolina Milanesi, chief of research at Kantar WorldPanel. "Microsoft wants users and data and it does not matter through what OS you get them," she said. "For Apple, it is still hardware that drives the business."
The Band is "designed to showcase the power of Microsoft Health," according to Microsoft. And it's cross-platform, so it works with Android, iOS and Windows Phone smartphones via a Bluetooth connection.
Also cross-platform is the Health app, which runs on those mobile OSes and works with other devices like the UP fitness band from Jawbone and software like MapMyFitness, MyFitnessPal and RunKeeper, according to Microsoft Corporate Vice President Todd Holmdahl in a blog post.
With Band and Health, Microsoft's main aim is to "showcase their cloud and analytics capabilities," said Milanesi. "Microsoft is working with partners and will rely on them to bring to market other devices, which is the same strategy they have in PCs, phones and tablets. They are also starting small to learn from live users how to improve and develop their offering."
In an unusual move, Microsoft set up the Band to integrate with various partners, including Starbucks and Gold's Gym. With a Starbucks card loaded to Microsoft Health, owners of Band devices can pay for coffee directly from the device and get a $5 Starbucks reward at the start.
Fitness wristbands that work across multiple mobile OSes aren't new: the Fitbit, Pebble, Jawbone, Nike and others also play well with different smartphone platforms, fitness apps and notification services. But Microsoft's entry is especially noteworthy given the companies history, size and recent struggles to sell tablets.
One theory regarding the limited supply is that Microsoft was being cautious after losing more than $1 billion on its Surface tablets. "Microsoft was burned with the write-down on Surface, so I think they were very conservative on the builds for Band," said Patrick Moorhead, an analyst at Moor Insights & Strategy.
Another factor: The company may be trying to get ahead of the upcoming Apple Watch, which is due to arrive in early 2015, and Apple's HealthKit software, and fend off other new smartwatches and smart wristbands, such as the Intel MICA and the Samsung Gear S.
"Microsoft has been late in the past with new form factors like the touch-based tablets and smartphones, which put pressure on them to not to be too late with a fitness device," Moorhead said. "Therefore, Band was developed to show that they weren't that late, but also to show off their new Health platform."
Ironically, the recent explosion in the number of new smartwatches and fitness wristbands could help Microsoft -- if users connect their new devices to Microsoft Health.