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2013-07-26_09h33_44

At an internal meeting, Microsoft CEO Steve Ballmer admitted that the company overproduced the Surface RT tablet, leading to its recent $150 per unit price cut. As quoted by The Verge’s Tom Warren, Ballmer plainly explained that the company “built a few more devices than [it] could sell.”

But we already knew that.

In its most recent quarterly earnings release, Microsoft took a $900 million charge relating to the Surface RT tablet line, essentially admitting that the inventory that it has on hand was not worth its previous internal valuation; you can’t cut the market price of a product that you have in a warehouse and not lower its value on your books. The write down cost Microsoft $0.07 per share. It missed expectations for the quarter.

Microsoft has been on a mission to clear Surface RT inventory for some time. As I wrote earlier this year, through a combination of giveaways and discounts, Microsoft was moving to liquidate what appeared to be mountainous superfluous unit volume of its ARM-based Windows tablet hybrid.

At that time, Microsoft released a bland statement, saying that the offers and handouts were in “response” to the “positive reaction” Surface had enjoyed since launch. That felt a bit backwards: If response had been so strong, why give away a single device or discount? Wouldn’t organic demand be sufficient? Well, as it turns out, reaction hasn’t been overly positive, so the entire argument was logically moot.

Ballmer said something else during the meeting that is a non-surprise: Microsoft is not selling as many Windows devices as it would like. We knew that, too. The figures released quarterly that describe the PC market are brutal – and dropping. Even Apple is suffering from declining Mac sales in the face of nearly insurmountable headwinds that it helped to create with its leadership of post-PC product categories.

Next-generation Surface devices are being designed and tested. I suspect that Microsoft learned its lesson regarding production volume: Prove product-market fit first, and then kick the afterburners.

Top Image Credit: BUILDWindows

If you’ve been waiting for a price drop to buy a Microsoft Surface tablet, your time is now. Microsoft recently announced a significant price cut in its entry-level Surface RT tablets. These are the less powerful Surface tablets on the market, and don’t run the full version of Windows 8. However, the Surface RTs are decent in their own right, and are now $150 cheaper. A 32 gig model now runs $349, and doubling the storage to 64 gigs will cost $100 more at $449. The price cut was likely the result of a few factors, including poor sales numbers and new models likely to hit store shelves later this year. The line of Surface tablets has yet to truly take off, but Microsoft is rumored to be debuting new accessories for the Surface soon, including a battery-equipped keyboard cover. If you’re looking to try out a lite version of Windows 8 or are just looking for a mid-range tablet option, the Surface RT is now available at $349, its lowest price ever.

The signs of doom are all aligned for Windows RT, which looks like it could soon inhibit the same plane of oblivion currently occupied by Microsoft Bob. Ars Technica’s Peter Bright has written a thorough pre-obituary for the current incarnation of Microsoft’s first attempt at creating a tablet-centric operating system, which he calls “a lemon” that consumers are “avoiding… in droves.” Bright lists several reasons for Windows RT’s failure so far, but most of them boil down to the fact that the operating system as it’s currently built has no reason to exist. “In spite of having all the working parts of Windows 8, however, it can’t (officially) be used to run desktop applications, even if the developers of those applications are willing to recompile for the ARM processor,” Bright writes. “Instead, all applications must come through the Windows Store, and be built using theWinRT API.”

Read the full story at Boy Genius Report.

“Apple wasn’t the only speaking at Goldman Sachs Technology and Internet Conference, and Microsoft’s CFO Peter Klein tried to garner some attention by saying that Microsoft is ready, willing and able to launch a device similar to Apple’s iPad mini,” Jack Purcher reports for Patently Apple. “But the talk ended there and melted into a fog of when they’d actually launch it.”

Purcher writes, “Back in 2012, CRN had [Microsoft CEO Steve] Ballmer on record as saying that they’re ‘not going to let any piece of this go uncontested to Apple,’ shouted Ballmer. ‘Not the consumer cloud. Not hardware software innovation. We are not leaving any of that to Apple by itself. Not going to happen. Not on our watch.’”

Read more in the full article here.

MacDailyNews Take: This is yet another excellent, original idea from Mr. Baller & Co.

If Microsoft isn’t hard at work transforming their Surface duds into mini flops and flushing even more R&D money down the toilet, they should be.

Don’t forget the kickstands and keyboards, dummies!

As always, we like their strategy. We like it a lot.

“The question of Office for iOS has burned for a year, but a release is still up in the air after comments by Microsoft chief Steve Ballmer at yesterday’s “new” Office 365 launch,” Liam Tung reports for ZDNet. “Asked about Office for the iPad, Ballmer gave a terse reply: ‘I have nothing to say on the topic.’”

“‘We’re very happy with the product that we’re putting in market,’ Ballmer told Bloomberg. ‘It makes sense on the devices like the Mac and the PC. We have a product that we think makes a lot of sense. We do have a way for people always to get to Office through the browser, which is very important. And we’ll see what we see in the future,’” Tung reports. “In meantime, the only tablet on which Office is available is Microsoft’s own Surface.”

MacDailyNews Take: Which is exactly the same as not having Office on tablets:

Crash and burn: Windows RT tablet sales in 2012 likely to total less than one million units – – January 30, 2013

Tung reports, “The fundamental issue thought to be behind the delay in bringing Office to iOS is Microsoft’s unwillingness to pay Apple’s 30-percent commission on apps sold through its App Store.”

Read more in the full article here.

MacDailyNews Take: Keep your dogshit in your own yard, Microsoft. We don’t want it and, best of all, it’ll only hasten your demise. iPad and iPhone are already firmly ensconced into the Fortune 500 and SMB without Microsoft’s bloated morass of insecure spaghetti-code. The world is rapidly learning that it can live without Office and, by failing to pollute iOS devices with their crapware, Microsoft is spreading the news better than anyone.

For the record, Steve Ballmer is the greatest CEO the world has ever seen – unmatched – certainly the best we’ve ever witnessed. We like his strategy, we like it a lot.

May Microsoft’s shareholders and BoD remain forever comatose and may Mr. Ballmer remain Microsoft CEO for as long as it takes!

(Which, at this rate, shouldn’t be much longer.)

I believe that good manners would suggest that a person say something nice before they then give a criticism, so with that in mind: Microsoft sure put a lot of well-spent money into television advertising for their Surface tablet. The ads are fun and clever and actually kinda make me want to buy one… until I read the reviews coming from those who have already had their hands on one ahead of the October 26 launch date.

It isn’t even that the reviews are necessarily that bad, it is that they are filled with compromises. It’s heavy, but the weight is well-distributed. Microsoft doesn’t have Retina, but apparently the display is not ‘that much worse’ than an iPad (though the price is just as bad). Almost everybody loves the keyboard though apparently it is prone to typos (maybe just takes some getting used to, but still reduces the usefulness).

Of course, it also doesn’t help that the Surface is seeing the light of day the same week as a major Apple event. Not because the iPad Mini (or even the other products released) are such big competitors of the Microsoft tablet: but because the news is filled with options. People are once-again reminded that there is more to life than Windows.

Early sales figures will tell us a lot; is the world waiting on the edge of their seats for a strong, Windows-based tablet? Will the corporate world adopt it in great numbers even if the consumer market rejects it? Chances are good that the device will fail on its own merit: just like HP and WebOS, there is really no app store to speak of. Why buy into a tablet having an identity crisis –is it an underpowered laptop or overpowered web browser?

More than likely, the Surface will just confuse and disappoint those loyal to Windows who so desperately wanted this thing to be as good as the iPad.

[via electronista]