Coffeehouse Thread

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So, is Surface RT a failure yet?

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  • User profile image
    DCMonkey

    $900 Million write-off for unsold inventory. Yikes.

     

     

  • User profile image
    BitFlipper

    I'm sure what with the wonderful new Metro Modern UI on the desktop being such a huge hit and all, MS will easily make up for this.

    Oh, wait....

  • User profile image
    evildictait​or

    This is part of the problem of Ballmer realigning Microsoft to be Devices and Services.

    Because whilst Microsoft's pretty good at Software, it sucks so bad at Devices and Services it's not even funny.

    Seriously. When was the last time you saw someone with a Windows Phone or Surface that has never worked with or for Microsoft (or who got one for free)?

  • User profile image
    cbae

    , DCMonkey wrote

    $900 Million write-off for unsold inventory. Yikes.

    We know it was a failure at $500. It remains to be seen what the $150 discount will do. The writedown was necessitated by this discount. In addition, they sold some units to conference attendees at a steep discount ($99), and IIRC they were planning on some new academic discount programs.

    However, I'm not sure why the writedown amount is so high. Microsoft stated that it anticipated selling only 3 million units of the Surface RT in the first year. Even if Microsoft built 3 million units in inventory in excess of what has been sold and all 3 million in inventory is expected to remain unsold, the writedown amount would be $300 per unit, which is probably close to the bill of materials. So even if Microsoft anticipated that all 3 million units had to go to landfill and the entire cost of manufacturing is written-off, how could Microsoft have overestimated the units to manufacture by 3 million units? This doesn't make sense.

     

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    Deactivated User

    Comment removed at user's request.

  • User profile image
    DCMonkey

    , cbae wrote

    *snip*

    We know it was a failure at $500. It remains to be seen what the $150 discount will do. The writedown was necessitated by this discount. In addition, they sold some units to conference attendees at a steep discount ($99), and IIRC they were planning on some new academic discount programs.

    However, I'm not sure why the writedown amount is so high. Microsoft stated that it anticipated selling only 3 million units of the Surface RT in the first year. Even if Microsoft built 3 million units in inventory in excess of what has been sold and all 3 million in inventory is expected to remain unsold, the writedown amount would be $300 per unit, which is probably close to the bill of materials. So even if Microsoft anticipated that all 3 million units had to go to landfill and the entire cost of manufacturing is written-off, how could Microsoft have overestimated the units to manufacture by 3 million units? This doesn't make sense.

     

    I believe the writedown also includes accessories like the Type Cover

  • User profile image
    cheong

    What does those fashion house do to the stocks remaining at the end of season. They sold these stocks at as low price as possible (equal to or even lower than the manufacturing cost) to people for attaining greater market share.

    Just treat it as a huge marketing campaign. If enough unit is being sold, perheps those mobile appalication developers will see it as relevent market and build application for it. Even if it doesn't work aas expected, at least these units won't dust in the warehouse.

    Without enough Apps, those WinRT Surface are just something maybe a little better than tablet web browsers to the users.

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    cbae

    , DCMonkey wrote

    *snip*

    I believe the writedown also includes accessories like the Type Cover

    Odd that I see no discounts for the Type Cover. I'm not sure what the writedown would be for then. Did Microsoft already start putting them in landfills?

  • User profile image
    Lizard​Rumsfeld

    The $350 new price without including the cover is a big mistake IMO.  I don't see them moving much at all at that price, it's still too high when you really need the type/touch cover to make use of Office RT effectively. 

    That, and the fact that Tegra3 sucks.  It was outdated on day 1, it's absolutely ancient now.  SurfaceRT was a deeply flawed product from the outset and time hasn't helped matters.

  • User profile image
    MasterPi

    , cbae wrote

    *snip*

    Odd that I see no discounts for the Type Cover. I'm not sure what the writedown would be for then. Did Microsoft already start putting them in landfills?

    Didn't they give away free covers at some point? Or was that just touch cover.

  • User profile image
    cbae

    , MasterPie wrote

    *snip*

    Didn't they give away free covers at some point? Or was that just touch cover.

    They might have, but what's the production cost of either of these accessories? $20? $30, maybe? There would have had to have been 10s of millions given away for the writedown to have contributed a significant percentage of that $900 million.

  • User profile image
    JoshRoss

    If you don't fail now and then, perhaps it's because you are not trying hard enough. If the app store was filled with cool apps, the bet on RT may have paid-off. But I think a shark was jumped with Windows 8. The Windows Phone ecosystem really had to pick up some momentum before that model was brought to the desktop.

    Instead of having a spark ignite a powder keg of win, the plague scene from, Monty Python and the Holy Grail was re enacted.

     

  • User profile image
    Charles

    I have to say, since I've installed 8.1 Preview, my RT device is now my main pad at home. It's quite nice. I removed the Desktop icon from the Start menu and run only WinRT apps for general computing and gaming. That said, I use Office when I need to on the pad, so Desktop is unavoidable. When I need the Desktop (and I always will in many circumstances), I fire open my ASUS Zenbook. I like typing words and code on a physical keypad. Like, right now. When I'm using a pad device, I do what I do when using a pad device. Any of you write code, letters, documents, blog posts, literature, spreasheets, powerpoints, mathematica, etc... on a pad device?

    C

  • User profile image
    Ray7

    , cbae wrote

    *snip*

    They might have, but what's the production cost of either of these accessories? $20? $30, maybe? There would have had to have been 10s of millions given away for the writedown to have contributed a significant percentage of that $900 million.

    Part of the problem is that we don't know the production costs for sure, and we don't know how many they have sitting in warehouses. They might have tried to get the costs down by buying securing more components at the outset, even if the devices hadn't been manufactured yet.

    If the discount doesn't boost sales then Microsoft is better off taking a larger hit now, instead of taking one small hit now and another one in the next quarter.

  • User profile image
    Ray7

    , Charles wrote

    I have to say, since I've installed 8.1 Preview, my RT device is now my main pad at home. It's quite nice. I removed the Desktop icon from the Start menu and run only WinRT apps for general computing and gaming. That said, I use Office when I need to on the pad, so Desktop is unavoidable. When I need the Desktop (and I always will in many circumstances), I fire open my ASUS Zenbook. I like typing words and code on a physical keypad. Like, right now. When I'm using a pad device, I do what I do when using a pad device. Any of you write code, letters, documents, blog posts, literature, spreasheets, powerpoints, mathematica, etc... on a pad device?

    C

    Then perhaps the obvious thing to do would have been to bundle the keyboard at the outset.

  • User profile image
    cheong

    @Charles:Just want to ask: Is there VBA support on that RT version of Office, and is protected document editing supported (it'll make the whole document readonly, even those unprotected cells cannot be edited last time I checked)?

    These two are major hurdles preventing RT/mobile version of Office be valid replacement of desktop version in normal business environment.

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    vesuvius

    @Charles: at work we have commissioned yet another iPad app, and am looking at doing the same again in a new iPad app in the next month or so, not through choice, but because we know an iPad will be here in 5 years time.

    Had Microsoft had an RT story for business, you would be seeing RT jobs, and a pickup in RT sales. Business feels let down by WPF & Silverlight, no amount of reorganization at Microsoft will get you out the mess you are in because of ignoring your main revenue stream (business).

    I was always taught that a bird in the hand is worth two in the bush. The two in the bush being phone and tablet. Not only have Microsoft hastened the decline of the desktop, they came up with an impossible plan to beat Apple and Samsung at their own game. Sure, they had to give it their best shot, but not at their own expense.

  • User profile image
    Bas

    , evildictait​or wrote

    Seriously. When was the last time you saw someone with a Windows Phone or Surface that has never worked with or for Microsoft (or who got one for free)?

    The day before yesterday. My plumber, of all people, had a Windows Phone. I'm seeing them more and more in the wild for the past few months, but maybe that's just because it's still so surprising to see one.

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