Microsoft takes a $900M hit on Surface RT tablets no one wanted

by TabTimes Staff

July 18 2013

Microsoft says it's taking nearly a billion dollar inventory adjustment to its financials due to Surface RT as part of its quarterly earning report released today.

Ahead of the bad news, Microsoft recently announced a $150 price drop on the Surface RT to $349 which may not still be enough to clear out the inventory.  

On the other hand, an IHS teardown of the Surface RT product last November said the bill of manufacturing and cost to build Surface RT with keyboard cover (not included in the new $349 price) was estimated at $284 and has probably come down since then. So perhaps even steeper discounts are in the offing.

The big issue with Windows RT is apps. While it does include Microsoft Office software, the ARM-based tablet doesn't run older Windows software so the library of available apps is considerably less than what Android and iPad offers.

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  • John Swain
    1 year 4 months ago

    Microsoft, do you remember what your business Is? Software. IBM led the way by selling off it's PC business to Lenovo. Rather than taking a 900 million write down, your probably could have sold it to HP, those guys paid billions for Compaq, and trashed it. Your biggest opportunity is licensing Office to Apple, and licensing Windows 8.1 to Samsung. Phablet-size PCs with dual Android/Windows OS will be the next step in the computer industry.

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