In its exceptionally bleak statement yesterday, Microsoft took a shocking $900 million writedown on inventory for the Surface RT, that launched in Gregorian calendar month, beginning at $500 ($600 for double the storage capacity). On Sunday, the corporate knocked $150 off each models; Mark Hachman’s back-of-the-envelope maths ballparks the unsold inventory at half-dozen million tablets, compared with perhaps one.8 million oversubscribed. this is often once a June promotion that offered the device to varsities and universities for the maximum amount as sixty p.c off.
That doesn’t presage well for future iterations of the Surface, or for Microsoft’s plans to maneuver additional into the hardware market. Chief military officer Steve Ballmer’s ready earnings statement created relevancy new Windows eight.1 tablets and PCs among the “compelling new devices” Microsoft has planned. whereas the Surface has scored some tight reviews and therefore the cut can’t hurt, it’s unclear however the corporate plans to compel individuals.
For now, Microsoft continues to be relying heavily on its laptop software package and enterprise businesses. They helped push the company’s revenue up ten p.c to $19.9 billion, tho' it fell well in need of analyst estimates. On last night’s earnings decision, chief financial officer Amy Hood was asked once she expects Microsoft’s tablets to catch up on the getting client laptop market. Points for honesty: “It can take an extended time for that to happen,” she said.