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

  1. #1

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


    Microsoft announced a $900 million "inventory adjustment" charge for its Surface RTs, parts and accessories on July 18. That write-down completely overshadowed the performance of the rest of the products and services that contributed to the company's Q4 2013 earnings.
    There are still relatively few physical stores where potential Surface RT customers can try out a device to see if they're interested in buying one. Microsoft's Surface ads are nothing to write home about, though they have started to get better -- especially the Siri-centric ones.
    But again, why did Microsoft make so many Surface RTs? If some back-of-the-napkin calculations are right, Microsoft may be sitting on an inventory of 6 million unsold Surface RTs. (Microsoft won't say how many devices it made or sold.)
    Isn't this a company whose officials have prided themselves on telemetry data and visibility? Yes, it was the first time Microsoft was making its own PCs, but the company has made its own gaming console, mice, and keyboards in the past, so there were people at the company who knew a considerable amount about supply chains.
    microsofts-$900m-surface-rt-write-down-what-happened

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  2. #2


    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?
    Microsoft's Surface problem: Blame the advertising? | Technically Incorrect - CNET News
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  3. #3


    Germany/Florida
    Posts : 4,514
    Vista and Win7


    $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.
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  4. #4


    Posts : 288
    Windows 7 Ultimate, Windows Developer Preview, Linux Mint 9


    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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  5. #5


    Sydney, Nova Scotia, Canada
    Posts : 6,490
    Windows 10 Education 64 Bit


    Quote Originally Posted by Vertex View Post
    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...
    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.
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  6. #6


    Quote Originally Posted by Vertex View Post
    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...
    M$ could reload them with Andriod then they would sell I bet.
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  7. #7


    Posts : 288
    Windows 7 Ultimate, Windows Developer Preview, Linux Mint 9


    Quote Originally Posted by labeeman View Post
    M$ could reload them with Andriod then they would sell I bet.
    They will sell but not as much as the iPad and M$ would never do that in a million years lol
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  8. #8


    Posts : 5,360
    7/8/ubuntu/Linux Deepin


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


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

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  9. #9


    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.
    Tech stocks: Microsoft sinks 10%
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  10. #10


    Posts : 454
    Windows 8.1 Pro with Media Center


    Quote Originally Posted by Vertex View Post
    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...
    The should bury them in the desert with all the Atari ET cartridges. ET. RT. ET. RT.
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