Microsoft takes a $900M Surface RT charge

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Dominato3r

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Aug 15, 2008
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REDMOND, Wash. — July 18, 2013 — Microsoft Corp. today announced quarterly revenue of $19.90 billion for the quarter ended June 30, 2013. Operating income, net income, and diluted earnings per share for the quarter were $6.07 billion, $4.97 billion, and $0.59 per share. These financial results include a $900 million charge, or a $0.07 per share impact, related to Surface RT inventory adjustments
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http://www.microsoft.com/investor/E...s/PressReleaseAndWebcast/FY13/Q4/default.aspx

Overall:
Microsoft's Q4 2013 earnings report is in, and the company is announcing revenue of $19.90 billion — a 10 percent increase from the same quarter last year. Microsoft posted $4.97 billion net income this time around with earnings per share at 59 cents.
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http://www.theverge.com/2013/7/18/4535194/microsoft-q4-2013-financial-earnings

The recent price cut and student pricing seems like they're trying to rid of the inventory instead of just dumping them all together.
 
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Mopetar

Diamond Member
Jan 31, 2011
8,470
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With a $150 price cut, they would need to have about 6 million unsold units in order for the math to work out. I'm not sure that the actual sales were, but that's a lot of unsold units either way.

You would think they would have at least kept the price the same until they could get the newer model in place before discounting the old models. There would be no practical difference, but people wouldn't be trumpeting as much bad news.
 
Ravynmagi

Ravynmagi

Diamond Member
Jun 16, 2007
3,102
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I don't think Windows RT is the worst idea ever. But Windows RT really should have been made for lower priced tablets. It was so weird seeing the Surface RT show up with a $500 price tag and then ASUS dumps out another with a $600 price tag. You guys have got to be on crack to think anyone would choose this over a $500 iPad or $400 Nexus 10.

The Surface RT should have been a 7 or 8 inch tablet with a $250 to $300 price tag.

And the 10 inch $500 Surface tablet should of been using an Atom processor with full Windows 8.
 
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BladeVenom

Lifer
Jun 2, 2005
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Mopetar said:
With a $150 price cut, they would need to have about 6 million unsold units in order for the math to work out. I'm not sure that the actual sales were, but that's a lot of unsold units either way.
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With the next generation Surface tablets being made, the question is what are they going to do with 6 million tablets no one is buying? Landfill or $99 blowout sale?
 
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MichaelBarg

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Oct 30, 2012
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BladeVenom said:
With the next generation Surface tablets being made, the question is what are they going to do with 6 million tablets no one is buying? Landfill or $99 blowout sale?
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And how can they have 6 million of them? Didn't Ballmer say that they expected to sell a couple million total? Surely they noticed that they were barely selling and cut back production. Perhaps it's more like 2 million and the $900m charge is already assuming a $99 blowout?
 
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swanysto

Golden Member
May 8, 2005
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My question is this, if they sell all these units at discounted prices, who will be in the market for their new inventory? Most likely people buying a discounted Windows tablet are people who probably don't really need tablets that bad. The people who need or really want tablets are most likely going to keep buying the next generations of what they have. Some of those people are Windows tablet owners, but apparently they are not a big enough group, or else they wouldn't have such a huge amount of unsold tablets.
 
Red Storm

Red Storm

Lifer
Oct 2, 2005
14,233
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The only things I really like about the Surface are hardware things, the kickstand, the keyboard cover and the magnetic attachment. Would have made a nice Android tablet...
 
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Genx87

Lifer
Apr 8, 2002
41,091
513
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How many of these did they order? I thought within a month they cut their order from like 2-3 million to a half million units?
 
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BladeVenom

Lifer
Jun 2, 2005
13,365
16
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MichaelBarg said:
Surely they noticed that they were barely selling and cut back production. Perhaps it's more like 2 million and the $900m charge is already assuming a $99 blowout?
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Maybe they couldn't cut back due to their contracts, or they think they need to keep production capacity for their 2nd generation tablets.

They just cut the price by $150, so I wouldn't think they are calculating selling them for $99 just yet.
 
Imp

Imp

Lifer
Feb 8, 2000
18,828
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This tablet whoring phenomenon is getting stupid. No one but Apple and maybe a little Samsung and Amazon have actually managed to get anywhere. The dead keep piling up: RIM/BB, Motorola, HP, Microsoft, early-gen Android.......
 
podspi

podspi

Golden Member
Jan 11, 2011
1,982
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I think the design for the Surface RT is excellent, but the argument for Windows RT is tough. I still will probably pick one up eventually, I feel like it is a tech collector's item, like the Newton :D
 
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Dari

Lifer
Oct 25, 2002
17,133
38
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Microsoft should've never made Windows RT. It was a rushed OS because Intel could not make a processor to rival ARM. But it was a decision that was likely made years ago. Now that Intel has stepped up their game Microsoft will kill this turd OS and hawk the regular Windows 8.
 
Midwayman

Midwayman

Diamond Member
Jan 28, 2000
5,723
325
126
Its a really disappointing tablet hardware wise. Especially for the price. If it had released this year with a 1080p screen and quadcore soc it would have been far more compelling.
 
Bacstar

Bacstar

Golden Member
Nov 2, 2006
1,273
30
91
Glad I waited and got the tablet (Samsung Smart ATIV PC) with the x86 version of Windows 8. I'm finding it quite useful since I can use the same programs/apps I use on my desktop, specifically Office 365 and Light Room.
 
Ventanni

Ventanni

Golden Member
Jul 25, 2011
1,432
142
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I've used a Surface and I loved it, but most people just don't know what it is.
 
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ChronoReverse

Platinum Member
Mar 4, 2004
2,562
31
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Can Android be hacked onto the Surface RT? If they do an HP Touchpad style fire-sale it'd be a nice upgrade for my Touchpad haha.
 
Red Storm

Red Storm

Lifer
Oct 2, 2005
14,233
234
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ChronoReverse said:
Can Android be hacked onto the Surface RT? If they do an HP Touchpad style fire-sale it'd be a nice upgrade for my Touchpad haha.
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If the Surface RT could run a well functioning Android I would buy one today.



.... Okay, maybe not. The new Nexus 7 is coming out soon and that's where my money will likely go.
 
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