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Microsoft's Surface RT Was Doomed From Day One
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."
..it failed. The last thing we need right now is more Windows.
I've said before the Surface marketing was one of the nails in the coffin. The TV ads mostly featured hipster dambasses dancing and hiphoping while spinning the Surface tablet. Very little if any product knowledge is communicated.
MS has to tell people WHY they should choose their option over iPad and dozens of Androids, Kindles, and Nooks. There are tablet for all price points. Some offer decent performance and graphics. Others are affordable. Surface is.... from Microsoft. I guess that's all you need to know.
Then there's the Metro GUI fiasco. MS basically appologizes for Metro on Windows 8 and offers a Metro-less option on the new betas. What does that tell a potential tablet buyer?
I think this thing will be discontinued within a year. If I were a Surface owner I'd be hoping for an Android or Linux port right about now. Can you root a Surface??? I guess I'm lucky I don't need to worry about that one.
Microsoft has never made a case for why people would want to buy a Surface RT. What does it have going for it that makes it stand out against the competition? Lets take a look:
iPad - The brand name that made tablets mainstream, and that's a big help when selling a product. Also works well and has a ton of apps.
Android (Fire, Samsung, Nexus, etc) - The most popular ones seem to all have price going for them: they're the best game in town if you want a $250 or less tablet. Lots of people fit into that category. Has lots of apps.
Surface Pro - It runs x86 Windows apps. The market that really wants that in a tablet is niche, but still.
Surface RT - Not cheap, not blowing anybody away in hardware specs, not boasting any interesting unique apps. Aside from really wanting a Metro tablet, what's the point? (And no, the average joe doesn't really want a Metro or Windows tablet.)
-- "So they told me that using the download page to download something was not something they anticipated." - Bill Gates
The surface doesn't have particularly interesting hardware. 1.3 GHz Tegra 3 CPU with relatively low res display. It should have been $350 from the start.
It's not that people hate Microsoft. It's that Microsoft acts as if it hates it's customers.
There's a certain weakness this exposes in Microsoft's products: the fact that people stay with them because they have legacy programs they can't let go of. Microsoft products don't sell themselves. The programs people want to run on them do.
In SOVIET RUSSIA... erm...NSA AMERICA, the Internet logs onto YOU!
Secure boot does exactly what it is supposed to do. It gives the manufacturer control over what you do with the device. Anyone that thought it was to benefit the customer lacks any insight into current corporate culture.
Posting to undo moderation.....Sorry...hit "Redundant", meant to hit "Insightful".
Someone mod up please! at $350, I very well may have bought a Surface when it was released.
But now it's a considerably older processor, still has few apps, and the "ooh, new shiny" factor has worn off, so it's unlikely to have a huge following.
No, I hate microsoft! Gates and company bullied and lied and pushed people out of business for their own self-interest. Now he wants to give away the billions he stole to charity. How about giving it back to the people you forced out of business! Modern day Robber Barons with no morals! So, yes we do hate Gates and his legacy! Hopefully, this is just another nail in their coffin! http://en.wikipedia.org/wiki/Robber_baron_(industrialist) Robber barons is a derogatory term applied to wealthy and powerful 19th-century American businessmen. By the late 1800s, the term was typically applied to businessmen who used what were considered to be exploitative practices to amass their wealth. These practices included exerting control over national resources, accruing high levels of government influence, paying extremely low wages, squashing competition by acquiring competitors in order to create monopolies and eventually raise prices, and schemes to sell stock at inflated prices to unsuspecting investors in a manner which would eventually destroy the company for which the stock was issued and impoverish investors. The term combines the sense of criminal ("robber") and illegitimate aristocracy (a baron is an illegitimate role in a republic).[1]
Locking "Metro" apps to their store was their biggest mistake. You'd think that after Ballmer's "Developers, developers, developers" chant, that they would have known that ahead of time! Imposing artificial barriers like this would have killed them in the early 90's.
Apple gets away with calling that sort of nonsense "good for consumers", sure, but they're a special case.
Required reading for internet skeptics
What? I never ran Vista x64, but I did run Windows 7 and do run Windows 8 in 64-bit. The only compatibility problems I've ever seen are with 16-bit programs which I cannot run any more. XP 64 had more problems, but I've even had success with that. (Then again, I didn't have to set that one up.)
I don't doubt that there were occasional problems, but there would also have been occasional problems with just Vista, regardless of bitwidth. Almost everyone who's talked about 64-bit Windows says that the issues were basically ironed out in Vista and 7.
So what compatibility problems do you refer to?
And because people on /. seem to "forget" their history, ARM isn't even close to the first non-x86 architecture that Windows has been available for; it's previously supported Alpha (NT 3.1-4.0), MIPS (NT 3.1-4.0), Power (3.51-4.0), and Itanium (XP, Server 2003, and Server 2008).
The Surface RT hardware is pretty nice. I'm an iPad user, but playing around with the Surface RT in a Microsoft store impressed me. The kickstand is neat, and the keyboard covers work really well (especially the one with actual travel). The problem was software.
People point out Metro as an issue, but that's not quite it; Metro is a travesty on the desktop (or laptop), true, but on a mobile touch platform it's very appropriate. The problem was lack of familiarity, lack of compatibility, and lack of marketing.
For the first issue, what I mean to say is that Surface RT has a full desktop interface, but restricts it severely. Metro is much better suited to a tablet, but people are used to the desktop interface, and Surface RT can still make a decent laptop (plug a mouse in and use the keyboard cover). Had the desktop been unrestricted on RT (no side-loading restrictions, same as regular Windows), then people could have transitioned more gradually, at their own pace, or even stuck to the desktop entirely if they wanted. This would have let people use the RT as a tablet when they wanted to, or as a laptop when they wanted to.
For the second issue, lack of compatibility, there is basically none. This ties in a bit to the third point, but the thing looks identical to normal Win8, so people expect it to run the same stuff. It doesn't. As has been pointed out, the architectural differences would not have prevented .NET apps from running at full speed on the RT (Microsoft just doesn't support it), and emulation of x86 code would have worked well for many apps, since any call to an OS function via Win32 would have resulted in native code execution anyhow. Depending on the application, that means that large parts of an x86 application would be running natively anyhow.
The third issue is lack of marketing. Microsoft did a terrible job educating people about what RT is (and how it differs from regular Windows), or why they would want it instead of an ultrabook or chromebook or other tablet. Users who did buy the RT were likely confused about why it wouldn't run their programs.
I think that a combination of an unrestricted desktop, compatibility with existing apps (via a native .NET environment and emulation), and better marketing could have made the Surface RT a success. Not necessarily a market leader, but at least it would have sold enough units to be considered successful. I know that I was personally tempted to get one to replace both my tablet and laptop until I realized how all the stuff that interested me would be disabled...
Although the quality of Microsoft Products have risen after gates left. When Gates left XP was just released and getting hammered by security issues. Compared to say Windows 7 and even Windows 8 which runs very stable and is a lot more secure than ever.
A big part of that was the "trustworthy computing" initiative that Gates started though. Actually even Vista was very close to being released (Nov 8, 2006) when Gates announced he was reducing his day-to-day role at MS (June 15, 2006).
Microsoft could change their name to "MyopicSoft" and it would fit better. They sincerely believe that they are a popular company and that people cannot wait to get their hands on Microsoft products. Too many yes men. Too many marketing people drawing the wrong conclusions from their numbers. So they produced a high-priced product that was, frankly, pretty bland. And they tried to market this bland product as the greatest tablet ever, to a yawning generation that knows when they're being lied to. What a waste of time and energy.
Proverbs 21:19
Honestly, I don't think either of those issues had an impact on sales... The RT tablets should have been priced somewhere between the iPad, and Android tablets... if they were around $250-300 they would have sold fine (relatively speaking). As it is, they were priced against more capable, and powerful, low end laptops. They were dramatically more expensive than most competing tablets. They were doomed from the start on pricing alone.
Michael J. Ryan - tracker1.info
Interesting how that same tactic worked for Jobs but makes Gates seem like a bull in a china shop.
Python: 'And then suddenly you have a language which says "we're all stuck with whatever the whiniest coder wants".'
Steve Ballmer is not a good business man.
In the land of the blind, the one-eyed man is king.
Very much so. The stock in that first day alone would go crazy up, Gates could pump and dump himself to get even crazier richer for his other projects.
I get a feeling it just needs Gates (or someone with his power) to sit in meetings and yell out 'THAT'S STUPID' when people do demos, something that I feel hasn't happened for the last 10ish years.
"You want to dump backwards compatibility? Windows? Our core product we sell everything else on top of? THAT HAS TO BE THE WORST IDEA EVER"
"We've spent 20 years nearly getting people used to the Start Button, hired the Stones to sing 'start me up', tied everything to that in training/promotional material, and now you want to get rid of it? HOW ARE YOU ABLE TO BREATH WITHOUT CONCENTRATING"
"Our user studies for 30 years show to never use colour to denote function, too many people are colour blind/colours mean different things in different cultures (you remember we sell outside the US, right?). And now you show me something that looks like a kid who ate a pack of crayons has thrown up on the screen, and expect me to congratulate you? WHY ARE YOU EVEN IN THIS BUILDING?? WHO LET YOU IN?!??"
Waiting for an amusing sig.
have you ever seen one?
the screen is good, the build quality is good, performance is decent.
but add up all those parts, you end up with a device that's got a serious identity crisis.
We have a pro in the office. I can't figure out what it's trying to replace. it's not quite a tablet (it's .5 inches think and has a fan).. and it's not quite a laptop - the keyboard cover (while it's a decent keyboard) is not as good as a true laptop.
MS wanted it to do too many things.. it does none of them well. even at $150 off, they're still not selling.
So what's left for Microsoft?. The RT was their feet in the ARM water, but they barely got wet. So all they have left is the Desktop market that keeps declining. Future wise, their core business model has bombed, leaving Microsoft in a river with no paddle. I guess stockholders can relax, seeing that nobody is betting on Microsoft's future; judging from their stock. If they were betting on Microsoft's future, their stock would be pretty grim by now.
Take a step back for a moment, when in the last several years has there been any good news about Microsoft?. Exactly, so what is holding their stock value up?. The news gets worse everyday, to the point where there is a big restructuring going on and everything from Microsoft is going Subscription based. The general idea here is a Company wouldn't do this unless they see a future in which they're strapped for cash. Subscription models lock customers in and keep the money flowing.
I'm willing to bet very soon we will see a version of Windows running on the cloud. You'll have the hardware, but the software is on Azure; and you will pay for it. Over and over again. If the recent outings about MS/NSA aren't enough to make people switch, the Windows Azure won't be either. It's hard to beat an addiction, especially when it's forced upon people whom are unaware of real options or how to use those alternative options. A sad state of affairs really.
You can't break into the market against the market maker when your (perceived) price to benefit is higher. You either need to be cheaper or better or have better marketing. Preferably all of those.
That's the same thing that killed other also (never) rans, like the HP Touchpad.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
And that's all I need. I think once you get past a certain number of apps, does it really matter any more?
Tony
The cost doesn't matter because they were trying to enter a new but very established market. Anyone with a spare $700 already has an iPad.
The only logical way to enter the market would be to buy their way in: giving away the hardware and hoping to make it up on MS App Store sales. They could have given RTs to schools full of children, sold them in phone kiosks at the mall for $50, stuffed them free in cereal boxes. Giving away a billion dollars worth of hardware is the only approach that would have made an impact.
The real crime against Microsoft's shareholders is there was already sufficient evidence that there was no room in the market for a fourth player. Look at the Nook: it's pretty much the same as a Kindle Fire HD, and it's even priced competitively. It's priced well below the iPad mini. Yet Barney Snowball is completely tanking as a result of its failure. Who at Microsoft could have believed that adding "me three" to B&N's "me too" was ever going to work?
If Microsoft wants to be a leader again, they've got to get in front of a trend, not follow it for four years then release a clone. They also have to stop swallowing their own bullshit and stop believing "ours will have the coolest software." Even if they did have the coolest software, it doesn't matter. Nobody with a wallet gives a damn. Consumers have proven they want "new", not "better".
John
So, IBM?
Pretty much. They need to focus on their core demographics – mostly business users, but also to a lesser extent power-users and gamers. Forget about portable, forget about Metro, and instead work on keeping businesses on Windows. Cultivate a professional attitude, not the kind of Apple-wanna-be hipster nonsense we've seen from them recently. Make it clear that "Microsoft will be here for you, 5 years from now, 10 years from now, 20 years from now." Make good, solid incremental changes without breaking stuff. Maybe even consider a new version of VB that is backward-compatible with VB6 (or open-sourcing that ancient compiler) as a sign of good faith. Consider offering extended support for XP to large companies by subscription only – this could potentially be a nice revenue stream with little effort needed.