Microsoft's $900M Surface RT write-down: What happened?

Microsoft's Surface problem: Blame the advertising?

Thursday will have seen no Redmond Rumba. There will be no pas de deux, especially not an iPad de deux. If Microsoft will be dancing, it'll be dancing alone.
Launching a new product is hard. Launching a new type of product -- and, for all the alleged failure with the Surface RT, the Surface idea was unquestionably thinking different -- is harder than trying to get politicians to think about anyone but themselves.
Which leads me to 14-year-old girls dancing on benches.
They (and some very pretty dancing boys) were the first spokespeople -- or, rather, jigpeople -- for the Surface.
At the time, I wanted to be my generally charitable self. So I called the ad surface deep.
This was jiggery without pokery. It was a potpourri of "lifestyle" advertising that you've seen before. The cast of "Glee" meets the "Kids From Fame" and they all have a house party. Lemonade optional.
Is this the way you launch what you hope will be a revolution? Or at least your revolution?

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Microsoft's Surface problem: Blame the advertising? | Technically Incorrect - CNET News

$900 million is not too bad. I had expected a much bigger write-off that would also include the Surface Pro. But maybe they want to do that later because it is better to shock the world in small doses.

And besides the $900 million one must not forget the billions they invested into the programming of the RT. Although that is water under the bridge, it is ashame if you think what good could have been done with all those resources.

The question for me is that, what will they do with those unsold RT tablets? Technology would continue to evolve and would phase out the unsold RT tablets eventually, don't you think...

Vertex said:

The question for me is that, what will they do with those unsold RT tablets? Technology would continue to evolve and would phase out the unsold RT tablets eventually, don't you think...

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Maybe they should hand them out to Microsoft MVP's, hint, hint, Microsoft. I'm in no hurry to buy one but I'm sure I could find a use for one if I was given one.

Vertex said:

The question for me is that, what will they do with those unsold RT tablets? Technology would continue to evolve and would phase out the unsold RT tablets eventually, don't you think...

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M$ could reload them with Andriod then they would sell I bet.

labeeman said:

M$ could reload them with Andriod then they would sell I bet.

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They will sell but not as much as the iPad and M$ would never do that in a million years lol

According to this article, $150 discount x 6 m unsold units = $900m .

It could get worse if they don't get rid of them.

They might need to knock another $150 off each, or give them away.

"The consumer x86 PC market declined as users continued to prioritize devices with touch and mobility," Microsoft Chief Financial Officer Amy Hood said on a conference call with analysts. "At the same time, we saw continued strength in our enterprise products and cloud solutions and increased adoption of our consumer services."

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The bold bit is what they have lined up for the public.


Microsoft Badly Misses Q4 Targets, Writes Down Surface RT Inventory - Investors.com

It looks like Wall Street is in a sell mode on M$ stock I guess they don't want to wait for the next 900 million write off on Surface RT.

Microsoft skidding. Shares of the tech giant are down more than 10% in midday trading after its quarterly earnings missed Wall Street expectations.

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Tech stocks: Microsoft sinks 10%

Vertex said:

The question for me is that, what will they do with those unsold RT tablets? Technology would continue to evolve and would phase out the unsold RT tablets eventually, don't you think...

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The should bury them in the desert with all the Atari ET cartridges. ET. RT. ET. RT.

I'd think now there's a marketing opportunity... buy a Lumnia and get a free RT! a Win-Win situation? or should I say a Nokia-Win situation...ROFL

[h=1]Microsoft stock plummets 12%[/h]

SAN FRANCISCO -- Shares of Microsoft took a massive hair cut on Friday, slashing off 12% following the company's Thursday earnings report results and erasing billions of dollars of value from the software giant.
Microsoft shares fell $4.37 to $31.08 in afternoon trading.

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Microsoft stock plummets 12%

Actually, I see this as a good thing. Once the new Surface drops with LTE connectivity and the convergence with WP/W8 evolves here in a few months, they'll have a gold mine in consumer interest in wifi only Surface RT's. These will already be readily available.

I guess tiles are not the most attractive things for much of the mobile consumers. That along with inadequate advertising, late arrival in the market scene, apparently incompetent app store and just insignificant mojo to attract much of the consumers have made this into a flop.

I guess we all have to learn it the hard way sometimes and M$ is on that phase right now.

Maybe the SEC needs to ask M$ some questions also.
Why is the SEC Silent on Microsoft?

Circle back to October 2012 when Ballmer said this to pump Surface: I don't think anyone has done a product that I see consumers wanting.
Mind you, the aforementioned May 2013 data shows that Microsoft shipped 900,000 tablets in Q12013, while Apple shipped 19.5 million. Last week, Microsoft had to write down nearly $1 billion worth of inventory for a device that, just six months ago (and three months before to this abysmal quarter) was, based on official company statements, seeing strong consumer reception with growing demand that spurred company plans to expand its availability. Now, according to IBT's David Gilbert, Ballmer sits on about six million unsold tablets.
RT. Pro. Doesn't matter which flavor, the Surface tablet is an unmitigated disaster that, even to this day, Ballmer and Microsoft refuse to admit failure on. The guy continues to shamefully and unabashedly pump Microsoft's device strategy. Ballmer's optimism, no doubt, had to play a role in the 28 percent year-to-date upside in MSFT prior to Friday's 11.4 percent crash.

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Why is the SEC Silent on Microsoft? - TheStreet

labeeman said:

Microsoft stock plummets 12%

SAN FRANCISCO -- Shares of Microsoft took a massive hair cut on Friday, slashing off 12% following the company's Thursday earnings report results and erasing billions of dollars of value from the software giant.
Microsoft shares fell $4.37 to $31.08 in afternoon trading.

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Microsoft stock plummets 12%

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Hi there
Please UNDERSTAND the markets before you post that type of info

Have you had a look at even YESTERDAYS (Mondays) graph.

Anybody knows that doing Any sort of Market trading in the week Earnings are posted is usually a big NO NO as shares are often very volatile especially after the announcements are published. SENSIBLE traders either take profits very quickly and wait again for the Market to settle or like a lot of people buy at the bottom and wait a few days for the price to rise and take a nice profit. (Usually this is done by "Shorting the shares" or using "OPTION Spreads" like Iron Condors.) MSFT has options which can also be traded WEEKLY as well as normal MONTHLY options too.

Iron Condors Explained | Online Option Trading Guide

Here's a link to some OPTION prices for Ms -- explaining CALLS and PUTS is beyond the scope of this post - we are on a Windows Forum not a Traders Forum but some people might be interested. Google further for explanations.

MSFT Options | Microsoft Corporation Stock - Yahoo! Finance

The RED values mean the Market consensus is the Shares are rising so the value of the "PUT" option goes down -- the "PUT" basically says that you are prepared to Buy stock at this price during the life time of the option and for this you receive the Premium. For Calls it's in reverse. Google further for more info --suffice to say if you do this carefully you can easily make 2 - 3% A WEEK on a small amount of money using SPREADS. You won't make BIG money but starting with say 8,000 USD 2% a week compounded over time soon mounts up. !! -- Don't PM me - I'm not giving any investment advice - you have to do that on your own- and I've more or less retired from computing now so I have more time to study these things.

A lot of the big market movements are done by the HUGE investors like Hedge Funds, institutions etc often on Automated trading systems -- these produce in a lot of cases some counter intuitive movements in prices and this is where small traders like me can pick up a few crumbs from the table. !!!!

The big institutions are driven by "FEAR and GREED" so they often get very quickly out of positions if they think they are on a losing streak. The rest of the market follows like a Herd of Cattle and this exaggerates the price movement. The movement usually goes too far either way and this is where you pick up your gains as the momentum shifts back again to something more sensible.

I suggest you do a bit more study on the psychology of the Market before quoting random Market moves or you'll lose BIG MONEY very quickly. !!!!!

MS is into a lot of other things these days such as Robotics, smart instruments for Homes, Enterprise services etc etc. Windows isn't its only earner anymore and while no company likes to post losses (or profits far smaller than expected) there's no way it's even REMOTELY in trouble. Apple on the other hand has a much more difficult problem -- Iphones perceived as getting too long in the tooth, Ipods now virtually obsolete, the tablet market maturing --what does it do next -- It's not into servers or Enterprise offerings --how many businesses do you know have an APPLE server unless its a fruit dispensing machine in the Canteen.

Cheers
jimbo