Forums - Microsoft Discussion - Microsoft Lost $900 Million on Surface RT in Q1

Today, as part of its Q4 earnings report, Microsoft announced that it has incurred a $900 million loss due to its struggling Surface RT tablet. While the company otherwise reported $4.97 billion in earnings from $19.9 billion in revenue, the Surface RT cost the company a significant sum as a result of "inventory adjustments."

The news comes on the heels of Microsoft's $150 price drop on the Surface RT, now carrying a $349 MSRP for the 32GB model and $449 for the 64GB version. While Microsoft has not released specific sales statistics, IDC figures for Q1 placed Surface sales at under a million, with the Surface Pro accounting for a majority of total units sold.

Based on a stripped down version of Windows 8 and running apps optimized for touchscreen interfaces, the Surface RT acts as Microsoft's alternative to the iPad and Android-based tablets. However, with a limited array of compatible apps and the Surface Pro offering a far greater level of versatility, the Surface RT has struggled to find an audience.

http://www.ign.com/articles/2013/07/18/microsoft-lost-900-million-on-surface-rt-in-q1



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Its in the official thread and has been discussed. Flogging them off cheap ready for a new wave of more powerful and better machines. They should have waited and not bothered with this first wave.

Just the $5bn profit this quarter and $27bn profit for the year then.

http://gamrconnect.vgchartz.com/thread.php?id=164234&page=1#



wow didnt know it performed this bad. if this isnt called a flop i dont know what is.

 

Theres a lot of better tablets out there. I guess all those billions wont guarantee success.

A $900m writedown doesn't mean a $900m loss.

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kowenicki said

Just the $5bn profit this quarter and $27bn profit for the year then.

The problem with that is that you could justify MS doing ANYTHING, no matter how little sense it makes, because the background revenue from just being Microsoft will cause quarterly profits anyway. MS could hand out $900m of cheeseburgers on street corners and it'd be OK.

The important message from this writedown is that certain people and departments within Microsoft have no idea what they're doing or what the market wants. If these people are promoted within the Windows division, eventually the background revenue will be under threat. There will come a time when a Windows device isn't necessary in every house or office.



Honestly I'd buy a pro, but just not at those prices.

Soleron said:
kowenicki said

Just the $5bn profit this quarter and $27bn profit for the year then.

The problem with that is that you could justify MS doing ANYTHING, no matter how little sense it makes, because the background revenue from just being Microsoft will cause quarterly profits anyway. MS could hand out $900m of cheeseburgers on street corners and it'd be OK.

The important message from this writedown is that certain people and departments within Microsoft have no idea what they're doing or what the market wants. If these people are promoted within the Windows division, eventually the background revenue will be under threat. There will come a time when a Windows device isn't necessary in every house or office.


Thats right... you can. As long as the revenue and profit continures that is 100% correct.

Having cash cows from enterprise, office and windows allows them to experiement.  I would have thought that was obvious.  Xbox was one such experiement.

The RT was simply too early.  It made a noise in the market, which was probably part of its aim.  Next shot will be better and clearly windows tablets and hybrids are popping up all over the place.  If they mke the next pro a bit cheaper and more efficient it will do well enough.

...and yes a $900m dollar write down isnt the same as a loss but you will be banging your head against a wall on that one.



bananaking21 said:
wow didnt know it performed this bad. if this isnt called a flop i dont know what is.


well if you are going off the "losses" incurred (these arent losses by thew way), then there are so many answers I could give but you wouldnt like them and it may be off topic.



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kowenicki said:
...


Thats right... you can. As long as the revenue and profit continures that is 100% correct.

Having cash cows from enterprise, office and windows allows them to experiement.  I would have thought that was obvious.  Xbox was one such experiement.

None of their experiments have net profited. Not even Xbox.