Microsoft takes $900 million charge on unsold Surface RT tablets

By Shawn Knight
Jul 19, 2013
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  1. Microsoft on Thursday posted lower than anticipated earnings which sent shares plummeting in afterhours trading. If that weren’t enough, the company also took a $900 million charge on unsold Surface RT tablets.

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  2. tipstir

    tipstir TS Ambassador Posts: 4,578   +76

    Sell those Windows Surface RT for $99 bucks right now, then watch them fly off the shelves, like they did with the cabbage patch dolls in the 1980's.
    avoidz likes this.
  3. Chazz

    Chazz TechSpot Enthusiast Posts: 624   +57

    So they posted 4 billion profit off near 20 billion in revenue. Not good enough.
  4. That's only 2% profit. It's easy to look at a number in the billions and say that good enough, but you really need a bigger return than 2% no matter the total dollar amount.
  5. I was looking forward to the Surface as an alternative to my laptop. But terrible advertising strategy. They had young people around a conference table dancing! Who were they targeting? There is usually at least one "middle aged manager type" person in most meetings in any office around the world. Not a single manager type person in that commercial. In contrast, I was not an iPad fan when it was launched, I saw the commercial when they showed how to turn a page. I was sold at that point. Ballmer is very rich and one of the best operational managers in corporate history, a visionary he is not. Steve Jobs knew exactly how to market his tablet.
    avoidz likes this.
  6. misor

    misor TechSpot Addict Posts: 968   +147

    Sell it cheaper and for 150-250$ equivalent, I'm buying. :)
  7. GhostRyder

    GhostRyder TechSpot Evangelist Posts: 2,138   +498

    If they go too much cheaper, they wont make any money on them, if you think about it, these things are a decent buy for what your getting. I got the PRO version, but even the RT was pretty good as far as tablets go. Im not saying go out and buy one, they are the best thing ever, I just think a lot of people are ignoring them based on the fact they don't like Windows 8, mine surface works very well and is quite fun to use.
    spectrenad likes this.
  8. mailpup

    mailpup TS Special Forces Posts: 8,385   +205

    Perhaps you didn't intend to but from what you posted it sounds like you base your buying decisions exclusively on commercials. You are certainly free to do so but I would look into it a bit more than that.
    cliffordcooley and treeski like this.
  9. JC713

    JC713 TechSpot Evangelist Posts: 6,719   +873

    If this was $400 with a keyboard and the desktop was more flexible, I would give you my money right now.
  10. nismo91

    nismo91 TechSpot Maniac Posts: 999   +11

    I kinda hope they sold it at a bargain. remember hp touchpads? lol
  11. Jim$ter

    Jim$ter TechSpot Enthusiast Posts: 119   +20

    I agree they need to sell them cheaper. If they want Windows 8 to have a chance take a loss on the surface and start to saturate the market or your gonna lose!

    Everyone I talk to hates Windows 8. That a image they need to change. The need to fix Windows 8 o the desktop and sell the surface cheaper. Then they will start doing better. I don't think 8.1 is going to change the mind of desktop users much. I will still have to install start8. I get calls all the time from people with new computers. Windows 8 is just way to confusing for normal basic users who just want to be on the internet and do their basic stuff.

    I might buy one at $199 with keyboard...but not at $349. Still too expensive. They should compete with Android not iOS!
    avoidz and cliffordcooley like this.
     
  12. Jim$ter

    Jim$ter TechSpot Enthusiast Posts: 119   +20

    Ohh that's lovely it didn't post anything I said...not typing all that again.

    But I agree sell it cheaper. $199 with keyboard and I will but one
  13. MilwaukeeMike

    MilwaukeeMike TechSpot Evangelist Posts: 2,017   +683

    I agree... Microsoft wanted to compete with the iPad so they tried to be cooler than Apple. In my opinion, they could be cooler than Apple, but you can't do it by standing on a table and telling everyone you're cooler than Apple.

    Remember the Apple vs. PC commercials where that trendy hipster looking dude would talk to the chubby guy in the suit and glasses? that's how you do it... Like how Samsung made themselves cooler than Apple by showing adults at the grad party bumbling on their iPhones while the grads used Galaxies. You have to let the consumer decide who's cooler.
  14. Geforcepat

    Geforcepat Newcomer, in training Posts: 60

    Lol! are they really surprised?it's a wonder it didn't hit a 1.+B write off.lowering the price still is not gonna help any.
    avoidz likes this.
  15. treeski

    treeski TechSpot Guru Posts: 867   +128

    Whether they took a hit from the Surface sales or not, they'd still need to lower the price to move the rest of the inventory, so they can make way for Surface 2.
  16. Isn't that 20%?
  17. Tekkaraiden

    Tekkaraiden TechSpot Maniac Posts: 892   +52

    I actually received an email from microsoft offering to sell me one. I figured I'd take a look so I clicked the link and wasted 15 mins trying to find it.
  18. Geforcepat

    Geforcepat Newcomer, in training Posts: 60

    Whether they took a hit from the Surface sales or not, they'd still need to lower the price to move the rest of the inventory, so they can make way for Surface 2.[/quote]

    Ha,whens the last time m$oft lowered the price on anything to clear room for something?especially when it's only about a year old.surface 2 will suffer the same fate.I think most people
    know this(except microsoft of course)
     
  19. psycros

    psycros TechSpot Booster Posts: 670   +202

    The only question is how long Microsoft will pursue their failed Windows 8/Metro strategy before they come around. To the consumer, Microsoft *is* the PC desktop. Nobody wants their PC to look and act like a phone. They should completely retool Metro to make it attractive and user-friendly like other mobile UIs and sell it only on phones and tablets.
    avoidz and cliffordcooley like this.
  20. Great windows 8, just great.
  21. Kneep

    Kneep Newcomer, in training Posts: 40

  22. Kneep

    Kneep Newcomer, in training Posts: 40

    Agreed
  23. TheBigFatClown

    TheBigFatClown TechSpot Booster Posts: 399   +136

    Silly people, not purchasing Surface RT tablets just cuz it has Windows 8 installed. People are so shallow. ;)
  24. tipstir

    tipstir TS Ambassador Posts: 4,578   +76

    Tablet
    Android - $59 and up (32GB)
    Surface RT $349 and up (32GB)

    Prices should be like this...

    Tablet
    Surface RT $99 to $149
    Surface Pro 32-bit Powered by Intel Atom Dual Core 1.8GHz $199 (32GB)
    Surface Pro 32-bit Powered by Intel Atom Dual Core 1.8GHz $249 (64GB)
    The other 64-bit i5 Surface Pro really expensive..

    Nothing to do with Windows 8 on there, it has to do with pricing these tablets.
    Microsoft pricing is high since everyone including the Corp VP, Corp CEO get high salaries
    so they pass down those high wages in higher cost for the Surface Tablets.

    To restructure a company like Microsoft on whole needs to start from the Corp top and work down.
    It's all about profits with them not about the customer needs or what they can get for they're money today.

    Windows 7 will be the last of it's kind and everyone uses it more than Windows 8. Things will change
    in the coming years. Surface will sell more but right now, Microsoft needs to get it's Corp House in order!
  25. yukka

    yukka TechSpot Paladin Posts: 709   +28

    Sell them cheap and make money from apps. But unfortunately they were hamstrung by their partners into pitting the price higher so they didn't undercut other windows 8 tablets. Not ideal and its had the expected result.


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