Desperate Microsoft cuts Surface Pro tablet prices; could signal even more losses

“Just over two weeks after Microsoft (MSFT) took a $900 million charge to write down inventory of its poorly selling Surface RT tablets, the software giant has cut the price of its premium Surface Pro tablets by $100,” Patrick Seitz reports for Investor’s Business Daily.

“The Surface RT writedown came shortly after Microsoft slashed the price of its Surface RT tablets by $150 each,” Seitz reports. “The new discounting action raises the question of whether Microsoft will have to record another big loss, this time for its Surface Pro inventory.”

Seitz reports, “The Verge reported the price cuts on Sunday, noting that they will be rolled out in the U.S., Canada, China, Hong Kong and Taiwan this month… Microsoft launched its Surface Pro tablets on Feb. 9 in the U.S.”

Read more in the full article here.

MacDailyNews Take: Abject failure. 🙂

[Thanks to MacDailyNews Reader “Rainy Day” for the heads up.]

Related articles:
Microsoft’s Surface sales figures are in, and they’re a total disaster – July 30, 2013
Microsoft earnings, sales badly miss expectations; $900 million inventory writedown on Surface tablet flop – July 18, 2013
Gartner: Apple to overtake Microsoft in total OS sales in 2015 – June 25, 2013
Apple Macintosh owns 45% of PC market profits – April 16, 2013
Steve Jobs’ revenge – April 12, 2013
Apple Macintosh on the rise as Windows PC market plummets – April 11, 2013
Gartner: PC Market posts 11.2 percent decline in Q113; Apple Mac sales up 7.4 percent in U.S. – April 10, 2013
IDC: PC shipments post the steepest decline ever in a single quarter, down 13.9% in Q113 – April 10, 2013

56 Comments

    1. Who knew that the Eminent Lords, the Captains of Industry, would so soon be treading water after their fateful encounter with the Iceberg of Destiny. It happened in 1912, it’s happening now.

  1. This is fascinating to watch. If I take off my Apple bigot hat and put on my tech neutrality hat, I look at the Surface and I see a product that is somewhat different than the iPad, might be appealing to a different class of user than the iPad, but certainly isn’t a complete piece of crap, like we accuse it of being. It’s too expensive. Lacks apps. But ultimately could be one of the cornerstones of a viable mobile ecosystem.

    Yet it completely fails to attract significant buyers.

    This is the danger of eroding mindshare. Microsoft has slipped so far in mindshare that’s its become the fat guy who likes the pretty girl but she’s got him firmly in the friend zone. Like the fat guy, It’s never going to break free of this…

    Now if the fat guy loses lots of weight and changes its attitude… hint hint

    1. With Microsoft it’s also a matter of eroding trust, both from consumers and developers, who know historically Microsoft has a tendency of abandonment. And who wants to get stuck with something holding the tech bag? Better to go with a safer and more complete solution and the safest is, of course, Apple. Microsoft seems to play with stuff like it’s a hobby.

      1. It reminds me of the Mac/PC ad where PC says “it won’t have any of the troubles that Windows Vista had. Trust me.” And this echos back through time. That was brilliant. At this point how could anyone trust MS?

    2. However you just said that the product itself isn’t that bad so the comparison would by definition not be with a fat guy who can lose weight it would with a guy who though visually decent enough on the eye has little or no communication skills or sex appeal at all. That is far more difficult to resolve as its far more abstract a problem to solve.

      1. Exactly. A smart fat guy has a fairly straightforward task of losing weight (as difficult as it may be) and he’s there. A dorky guy without a clue simply can’t figure it out on his own.

        As it is, MS will never figure it out on their own.

    3. Much of what you say is on point. Had MS included the keyboard(s) at no extra cost, it would have help sales somewhat. However a lack of Apps–and here, I mean Apps controlled and reviewed like Apple and unlike the Android virus-laden, Apps that aren’t Apps at all, and uncontrolled crapola–is the crusher. Plus, Microsoft can’t seem to understand the difference between an OS for a tablet and one for a laptop/desktop can’t be a shrunken version of the same, is the real drawback. Then stir in Ballmer, then you get a glob of dough that remains uncooked.

      Building an ecosystem like Apple’s takes years and years to create. Had it been done right in the first place, the, as you stated so well, it could have been a cornerstone upon which a great system could have been built.

      Now, it’s just too little too late.

      1. You also must figure in the big joke that when you buy a 32 GB Surface, you have only 14 GB of usable storage because the system and other crapware hogs all the rest. In the 32 GB iPad you get to keep 29 GB for your stuff.

    4. Lot of good comments. I just want to add the observation that fragmentation played a significant role in Surface’s demise. The Intel & ARM versions of Microsoft’s tablets ran two completely different and incompatible operating systems, that looked and functioned nearly the same, except for having different prices, specs, and app compatibility. That created a confusing choice for both consumers and developers. Which platform to support or buy into? Making the wrong choice was dangerous – you could easily be stuck with an abandoned platform, given how unlikely it was for both survive, fulfilling the same function while being incompatible.

      Faced with decision paralysis, consumers & developers ended up choosing neither, killing Surface.

    1. My IT dept. gave me a Surface Pro to use for a few weeks for testing purposes. They thought I would be a perfect candidate since I’m such a heavy iPad user.
      My findings? (apart from window’s 8) The Surface Pro makes a great laptop. It worked well on the plane. It’s light and relatively easy to use and has pretty good (not great) battery life. I liked that it was light and easy to carry and easy to use as a laptop.

      What I didn’t like about it was that it made a lousy tablet. I told them that I wouldn’t use it as a tablet. It requires two hands to unlock and the desktop (non-metro) section of Win8 the icons were too small for fingers. It was easy to miss the icon. It really isn’t any better than than the old Win XT tablets from a few years ago. Plus, with the keyboard, when you opened the keyboard, the screen didn’t light up like the iPad does, I had to manually “wake” it up so I could contort my fingers to unlock it and use it. But if I closed the keyboard, it would automatically lock, when meant by the time my testing was done, I had developed ways to do stuff with the Surface that allowed me to keep the keyboard open, to avoid the finger contortion to unlock it. (it’s amazing how spoiled I am over the magic lid, the slide to unlock feature and the simple unlock passcode on the iPad).

      Would I use a Surface Pro? Sure, if it was a replacement for my current laptop and I was stuck in a Windows org. Does it replace an iPad? No way!

      Windows 8 on the other hand was totally useless to me and required what I considered to be a pretty big learning curve just to figure out how to use it and open the apps I needed. Simple things like opening Outlook were a pain and tedious.

      In summary, the device makes a great laptop, but a lousy tablet and Windows 8 with Metro really doesn’t cut it. I know I wouldn’t buy one personally and now I know without a doubt that I’ll never buy another Windows machine again.

      netcruizer

      1. Thanks for posting your experience. In my experience Windows is a schizophrenic’s delight with icons all over the place unlike OS X where everything is logically laid out. I think it’s due to Steve’s sense of order about everything.

        1. For sure. Not exactly OCD, but the next best thing. Since Steve’s departure, we’ve seen meandering. Here’s hoping the firm under Captain Cook does a course correction, to make the best even better.

    2. One of my colleagues was praising his Surface. “Look!”, he said,”The keyboard pops off and on.” as he so dramatically demonstrated. He is a complete idiot so my guess is that the Surface target demographic is the moron niche.

  2. The previous $900M write down was supposedly for a $150 loss per unit of unsold Surface RT. At some point, Microsoft may have to write down unsold units as a complete loss, which could be two to three times higher than $900M, depending on how many ultimately remain unsold.

    And now, a repeat with Surface Pro. It’s likely that Microsoft has even higher unsold inventory of Surface Pro.

    This costly problem with Surface is a symptom of how BAD Windows 8 has been for Microsoft. Surface is the showcase for Windows 8. Even Microsoft cannot just dismiss multiple billion dollar losses, without successful Windows licensing to bring in the cash. I think Steve Ballmer’s days as CEO are numbered.

    1. Certainly in a logical world he would have gone a longtime ago. I can only presume there is fear at all levels at Microsoft, for surely it is long past the period of delusion. No I think everyone feels if thy don’t see the reality then it can’t be the truth. Those with even one eye open are simply ignored in preference to sticking fingers in ones ears while humming the birdy song.

  3. It really pi$$’s me off when people say “Apple” are on their way out, or they are losing the battle ect ect. Apples position now is a polar opposit to MS. MS today is a clear example of a company that’s dying. I’m not saying they are dead yet, or will the end up vanashing but they are clearly struggling to come to terms with today’s market.

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