Microsoft's Surface RT Was Doomed From Day One 442
Nerval's Lobster writes "Last fall, Microsoft launched its Surface RT tablet with high hopes. The sleek touch-screen ran Windows RT, a version of Windows 8 designed for hardware powered by the ARM architecture, which dominates the mobile-device market; it also included a flexible keyboard that doubled as a screen cover. Microsoft executives told any journalist who would listen that Surface RT would position their company as a major player in the tablet arena, ready to battle toe-to-toe with Apple and various Android device manufacturers. Fast-forward to this week, and Microsoft announcing its financial results for the quarter ended June 30. Amidst metrics such as operating income and diluted earnings per share, one number stood out: a $900 million charge (the equivalent of $0.07 per share) related to what Microsoft called 'Surface RT inventory adjustments.' Microsoft had already slashed Surface RT prices by $150, so that nearly-billion-dollar charge wasn't a total surprise — but it did underscore that Surface RT is a bomb. From the outset, Surface RT had an issue with the potential to mightily trip up Microsoft: While Windows RT looks exactly like Windows 8, it can't run legacy Windows programs built for x86 processors, limiting users to what they can download from the built-in Windows Store app hub. While the Windows Store launched with 10,000 apps, that seemed paltry in comparison to the well-developed Android and iOS ecosystems. There's likely nothing that Microsoft could have done about this—every platform has to start somewhere, after all—but the relative lack of apps put Surface RT between the proverbial rock and the hard place: it couldn't rely on Windows' extensive legacy, and it didn't have enough content to make it a true contender from the outset against the iPad and Android tablets. Then there was the matter of price. Microsoft could have taken the Amazon route and sold Surface RT at a relative pittance in order to drive adoption—something that made the Kindle Fire a sizable hit. However, that sort of pricing scheme isn't in Microsoft's corporate DNA: it only cut Surface RT's price several months after release, as a defensive maneuver, when it's likely to do much less good."
Dupe - Six Million Unsold Tablets (Score:4, Interesting)
Steve Sinofsky (Score:2, Interesting)
I think Ballmer will be out by the end of Q1 next year and Sinofsky will be on the short list of replacements. Bill Gates doesn't want to be CEO of Microsoft again, and he's old and out of touch anyway.
Microsoft should NOT be a devices and services company, it should be a consumer-facing OS and services company. Apple and Samsung are much better at consumer devices than MS will ever be.
Re:I'm glad (Score:5, Interesting)
It failed because Redmond was four years too late, and Android and iOS are so dominant at all price points that there is simply no room for a third competitor. Surface RT offers nothing that mid and upper end iDevices and Androids do not.
In other words, Microsoft has been out-Microsofted.
Re:Steve Sinofsky (Score:5, Interesting)
I'd prefer Raymond Chen [msdn.com] as CEO, but I realize that's probably not a realistic option. What Microsoft needs to maintain its position is an obsession with backwards compatibility and not breaking anyone's workflow, and an understanding that they will never be hip or cool. They need to transition from a growth company to a dividend-oriented company.
Re:But... but (Score:4, Interesting)
They were dramatically more expensive than most competing tablets.
Nah, if I recall, they were on par with iPads. I think the lack of apps really did them in here, plus the price. If you had $500 burning a hole in your pocket and you were itching to try a tablet last year would you dip your toe in the water by buying an already established platform with tons of apps, acceptence, and user experience, or a brand new one with not so much of that, for about the same price? Microsoft should have been selling those things for a song from the get-go. Surface is a good interface but not so scary great that its going to whisk those tablets out the door.