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A Radical Plan For Saving Microsoft's Surface RT
Nerval's Lobster writes "Last week, Microsoft announced that it would take a $900 million write-off on its Surface RT tablets. Although launched with high hopes in the fall of 2012, the sleek devices—which run Windows RT, a version of Windows 8 designed for hardware powered by the mobile-friendly ARM architecture—have suffered from middling sales and fading buzz. But if Microsoft decides to continue with Surface, there's one surefire way to restart its (metaphorical) heart: make it the ultimate bargain. The company's already halfway there, having knocked $150 off the sticker price, but that's not enough. Imagine Microsoft pricing the Surface at a mere pittance, say $50 or $75 — even in this era of cheaper tablets, the devices would fly off the shelves so fast, the sales rate would make the iPad look like the Zune. There's a historical precedent for such a maneuver. In 2011, Hewlett-Packard decided to terminate its TouchPad tablet after a few weeks of poor sales. In a bid to clear its inventory, the company dropped the TouchPad's starting price to $99, which sent people rushing into stores in a way they hadn't when the device was priced at $499. Demand for the suddenly ultra-cheap tablet reached the point that HP needed weeks to fulfill backorders. (Despite that sales spike, HP decided to kill the TouchPad; the margins on $99 obviously didn't work out to everyone's satisfaction.) In the wake of Microsoft announcing that it would take that $900 million write-down on Surface RT, reports surfaced that the company could have as many as six million units sitting around, gathering dust. Whether that figure is accurate—it seems more based on back-of-napkin calculations than anything else—it's almost certainly the case that Microsoft has a lot of unsold Surface RTs in a bunch of warehouses all around the world. Why not clear them out by knocking a couple hundred dollars off the price? It's not as if they're going anywhere, anyway."
Illegal, no?
Posted from my Android phone. Oh, I can change this? There, that's better...
Port the full Win8 OS to ARM.
Include the ability to bind to AD and be managed by group policy.
Stop trying to be like Apple and do what they've already done successfully on two previous occasions: software emulation of the "legacy" chip architecture so that Windows RT can actually run x86 applications, just like Apple did with 68k to PPC and PPC to x86 transitions.
Seriously, no matter how you beat it, it won't gallop anymore.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
I believe E.T.: The Video Game provides a better example for what Microsoft should do with its surplus Surfaces.
Everything is better with chainsaws.
They already have some sort of plan like that, involving dumping them on the educational market. Someone in this country still believes the children are our (/their) future, I suppose.
So no cheap tablet for you!
Part of the thing that made the TouchPad fire sale successful is the idea that you could do something with it, and that something had nothing to do with the software that HP shipped on it.
The only way they get excitement for the Surface RT tablets is to do away with that SecureBoot horseshit. Then a fire sale might move the hardware.
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
Because fuck the shareholders, that's why!
Chairs to their faces all of em!
Mod me down, my New Earth Global Warmingist friends!
Put android on it.
It will become more functional, have better battery life and a bigger application library.
From the very start price was the biggest failing point for the Surface. They were crazy to price it at $499 WITHOUT their key marketing point...the keyboard case.
Microsoft is a software company targetting hardware here. Android vendors are hardware companies targetting software here. It's bad for the former to bring the cost of software down to $0. Likewise, it's bad for the latter for Microsoft to practically give the hardware away. Since Android's marketshare is now so much higher than that of Windows 8, and iOS would barely even notice the loss, the only companies that might have a real claim of injury would be Blackberry and those behind things like FirefoxOS.
If getting these things into people's laps gets them to buy a buttload of MS software or makes them so attractive to developers that everybody shifts over to RT, it could work. But I would call that highly unlikely. Otherwise, they're just taking an even bigger loss than before. It certainly didn't work for HP.
The cow says "Moo." The dog says "Woof." The Timothy says "Thanks, valued customer. We appreciate your input."
Can you stomach it?
There must be hordes of lawyers all over the world just itching for MS do something as silly as this.
THey will be made to pay dearly if they ever try to dump all this kit at well less than cost price.
Install Android or FirefoxOS and _then_ sell them.
in the hands of resellers who will promptly put them on eBay and Craigslist for $199-$250
isn't that what happened with the majority of the TouchPads that went for $99?
I like microcars
MS didn't use the same signing key as they used for the Linux loaders... so the verification always fails.
Now if you find a way to hack the UEFI secure boot loader....
No matter what the materials and other costs per unit, $900M still means a large number of units. There's ways they could use that stock to help keep up their fight for real estate in minds and hearts of users who still consider Microsoft and Windows and Office to be relevant, many of whom probably think the iPad was made by the "Windows people" since they've never seen anything by anyone else. Just imagine if they made a deal to start giving these away with Time-warner or Verizon service. As many home users consider the device and the network to be one thing anyway, they could gain a lot of mindshare that would be lost simply by doing so. Even $200 or more in rental fees from users adding a $10 line item to their bill for it would drop that $900M almost by an order of magnitude. App store purchases would increase overnight, and the remainder of the loss would disappear within a year. There's a lot of creative ways Microsoft could come out of this smelling roses, without "dumping" the stock, and end up better off. Just looking at the numbers you can tell they might be down, but they're not out.
Emacs: for people who just never know when to
You cannot load a diff OS on it, so it is worthless at nearly any price. I guess if a few dollars, you could tear it apart and salvage the LCD panel and such, but with ipad retina displays available on ebay for well under $50 it would need to be dirt cheap to make that pay.
"Imagine Microsoft pricing the Surface at a mere pittance, say $50 or $75 — even in this era of cheaper tablets, the devices would fly off the shelves so fast, the sales rate would make the iPad look like the Zune."
What?
Microsoft would be put in a very strange position of NOT wanting to sell Surfaces. The more they sell, the more money they lose.
Maybe the OP thinks that this will help them build up market share. I think that by the time Microsoft built up enough marketshare they'd be bankrupt, but on top of that, are consumers going to stick around when the prices are raised again? They're not stupid. Once the prices reset to something more realistic they'll go look at other platforms again.
Is this a joke?
Why not just unlock (via patch or something) the boot loader, so that you can load Android/Linux or GNU/Linux?
The bar was set by Nexus 10: $409, and this is for an excellent tablet running an OS that is solid proved and has tons of popular apps already available for it. So the price for a Surface Pro tablet should be more like $309 or so.
In the 90s, Windows and MS Office adoption was driven by de-facto discount/piracy (You could buy a cheap upgrade version to legalize your pirated version). It worked. Office and Windows became the standard.
It's probably the only way a technically inferior product can ever get traction.
Please do not read this sig. Thank you.
What they really need is a mobile-friendly ARM OS to run on them. Something like Android, if they want them to sell.
So not only would they take a loss on selling the devices at well below cost, but they have ongoing support/warranty costs. Fulfilling an order has some non-zero cost, so that also has to be deducted from the price of the device as well. They could try selling them without warranty or with a very simple 30 day exchange warranty for defective products, but that could leave them with a PR problem when people run into problems with no way to resolve them and the blogs start filling up with complaints about how Microsoft sucks because they won't stand behind their products.
I really wouldn't be surprised if selling the device for $50 costs MS more than destroying the devices.
That bootloader is locked and won't allow you to disable UEFI Secure Boot or change the keys on it, so Surface RT (the hardware) is still dead to me.
I went to eat some animal crackers and the box said, "Do not eat if seal is broken." I opened the box and sure enough..
Both the touchpad and the Playbook went on firesale and currently both are fighting for a fraction of a percent of the market.
The problems with winRT have been talk about a lot lately but my main disappointment was the software lock-in. Only "Metro" apps and only those available via the store? Sure, let's take all the best things about windows and throw them out. Great idea!
As if to jab the knife in further, the offer office as a non-metro app. The only non metro app. Why? Because the office codebase is so old convoluted that they can't port it to Metro. (Gee, I wonder if any other developers would like to go down this path)
That's what pisses me off about RT. You could port your existing apps with a tweak and a re-compile (And probably some quick hacking to make the UI more touch friendly). Anyone could make really great software for the thing. There is even proof shipping right on the thing, the entire Microsoft fucking office suite! And you can't touch it. Everything you and your end users want, and it's locked up so MS can be like Apple. (FYI you can port your own 'desktop' apps with a re-compile.. But you have to jailbreak your RT device to run them)
And yes, of course Apple does it the same way. Of course they have a locked down app store. (Really, why do I have to point this out? No fucking shit Sherlock) - But Microsoft is no Apple. It doesn't matter if RT is as good as Apple's offerings. It has to be BETTER or there is no incentive to switch. There is zero reason to pick up the RT because the existing Apple and Android ecosystems are so rich and well supported.
RIM made the Playbook dirt cheap. How'd that work out?
Trolling is a art,
The product will not receive security updates so all it's flaws will quickly have it compromised and render it unusable on the internet.
What an article, with no common sense forever. Of course Microsoft would sell lots of these tablets for $50-$75, or for $99. I would buy one immediately and use it to replace a picture frame or an alarm clock at that price. But it should be obvious to anyone that at this price, Microsoft will lose hundreds of dollars on each device, and they will forever destroy any chance of ever coming back.
The submitter went on about HP, and how they couldn't even deliver fast enough. Of course not. But they had contracts in place that forced them to pay for the parts, and to pay for the tablets being built and shipped, so they delivered the last tablets from the assembly line as the arrived, even though they were losing lots of money on each of those. But then the product was dead, with no chance of HP ever getting back into the market. If Microsoft went that way, then for a few hundred million dollars they would forever destroy their chance to ever crack the tablet market.
It won't make the iPad look like the Zune. The iPod didn't beat the Zune because it was cheaper, it beat it because it was a superior product. (I'm no apple fanboy, though I did briefly own an ipod before I got my smartphone). Dropping the price really low will make it look like a knock-off product, like "COBY" headphones or a fake Louis Vitton bag. Everyone will have one, but everyone will know that you paid a pittance for it.
They could still severely lock down the platform to improve battery life for example by freezing all threads of such apps when the user wasn't in desktop mode, and it's assumed that not all APIs would be available. Of course, being able to run a lot of Windows apps "in theory" does you no good as long as developers haven't yet recompiled their apps for ARM. But perception is important.
Maybe they're worried that (a) it would be too much work to expose and support the legacy desktop APIs for ARM, or perhaps even more likely, (b) it would cut into their Surface Pro x86 sales. In my opinion, they should frantically be trying to make Windows tablets get every little edge they can over the opposition.
But what do I know? I am not Steve Ballmer, and spend a lot more time sitting on a chair than hurling it.
1) Make device for $499.
2) Sell device for $50-$75.
3)????
4)Profit!!
Back when Lisas were not selling, Steve Jobs had the semi-brilliant idea of re-launching them as the "Macintosh XL", at only $3,995.
They sold like hotcakes. In fact, they sold out completely and they couldn't fill the demand as the whole Lisa production line had been dismantled.
Imagine Microsoft pricing the Surface at a mere pittance, say $50 or $75 â" even in this era of cheaper tablets, the devices would fly off the shelves so fast, the sales rate would make the iPad look like the Zune.
1) And then Apple could sell theirs for $1! :-|
2) MS would be taking a HUGE loss on them. They make OK money at $500. $400 might be break even. I'm pretty sure they don't want to lose $300 or more on each sale. That would lead to...
- raising the price 5-10x on the next release to return to profitability -- which no one would like if they were used to them being so cheap.
- leave them cheap forever, lose money forever.
There's a historical precedent for such a maneuver.
Yeah, it's called a "fire sale", and it's a final grasp at a few bucks, not part of a long-term strategy.
In 2011, Hewlett-Packard decided to terminate its TouchPad tablet after a few weeks of poor sales. In a bid to clear its inventory, the company dropped the TouchPad's starting price to $99, which sent people rushing into stores in a way they hadn't when the device was priced at $499.
Because they were retarded. They could have dropped to $349 and made a LOT more money and still sold every one, but in a much calmer fashion. Believe it or not, there is a sweet spot between "Sell none at $499" and "Sell thousands in hours at $99." It's called "supply and demand" and it's covered in the first 5 minutes of your first economics class.
Despite that sales spike, HP decided to kill the TouchPad...
No, the decision was already made. They decided to leave it dead because a) the CEO that day wanted out of that business and b) there was at least ONE person in the company who realized the million-percent spike in demand was due to the crazy price.
... the margins on $99 obviously didn't work out to everyone's satisfaction.
NO FUCKING SHIT. But that would be totally different with the Surface because... um...
Why not clear them out by knocking a couple hundred dollars off the price? It's not as if they're going anywhere, anyway.
Sure. We might see that. Though MS would want to save more face than HP would -- HP was leaving the business, period, whereas MS still a) sells the OS and b) needs for their to be hardware for that OS to run it on. Whether that hardware is made my MS or someone else, Windows can't be seen as a daed-end brand, like WebOS.
I'm guessing they'll either do incremental lowerings to clear out stock, or one good (but not ridiculous) price drop, like maybe $349. Possible $329 to directly compete on price with the smaller iPad mini. A lot depends on if MS is going to release another Surface RT. If so, it will be a small lowering, a typical "hey, last year's model is cheaper now." If not, it'll drop a bit more to clear them out in a reasonable time, but don't expect HP-like prices.
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Has anyone really sat down spending a few minutes playing with surface rt (or whatever it is called?)? It is actually a really nice device. I could see myself buying one if the price is right. The right price to pay is likely $150 with the keyboard.
This is the 3 or 4th /. post worried about the fate of microsoft surface ...as if one should care! Just let it die! It is a bad product, with a bad startegy and bad timing! Why care at all? With either Surface RT or not, or Microsoft itself. Pointing to desparate Microsoft-fans blog posts trying to save it is as little "news for nerds' as I can imagine.
-><- no
They already took the loss.
So? This wouldn't be to fix an inventory accounting problem. It wouldn't be to "stuff" a channel. It wouldn't be to sell below cost for illegal competitive advantage - or barely.
These tablets are now fiscal landfill. Selling at a price to recover distribution and delivery costs (so they don't bleed more) is a better plan than many.
And give us opportunity to HACK THE LOADER!
I wouldn't try cracking firmware on a device of questionable value, that cost me several hundred. But a sub-100 cheapie? Go for it!
"Flyin' in just a sweet place,
Never been known to fail..."
For $399, Surface RT + keyboard cover. That's all it takes for me to get a Surface RT. The keyboard is shown in the ads but not included in the package. I think iSuppli estimate the keyboard cover cost $20 to produce. I don't need a million apps, but I do need a keyboard a lot of the times.
MS offered it for this special price to Teched attendees. It is true that the $99 price made it an impulse buy, but after using it for three days, I quit.
There's just no good apps. And the killer feature of watching whatever video format I had available (eg ISO) was not available.
Have to use IE after using Firefox for years (no other browsers are allowed by MS).
Having to recompile everything to ARM seems to have killed this platform. After being spoiled by android by being able to get any app in any flavor I want and have complete control over my experience seems to have ruined me for the RT.
Steve and company are looking to get the "iPad halo". They priced at $499 for that very reason: pricing themselves above the iPad would lead everyone to say "why not just get an iPad?". Pricing below the iPad would be a de facto admission that the iPad is "worth more". Microsoft is trying to establish themselves as having a premium product.
This is why you will never see a Surface fire sale: It is an admission that the only reason to buy a Surface in the first place is because it's significantly cheaper than any other first party tablet (and most third party tablets that don't come in boxes with Chinese bullet points).
HP did the fire sale because they were looking to shuffle their inventory, and it was cheaper for them to sell them at a price well below manufacturing cost than it was to landfill them, and they did so because they were looking to get out of the tablet market anyway - they didn't care what it did to the Touchpad brand because the brand itself was headed for the dumpster out back.
Microsoft still wants to sell tablets. Microsoft wants to sell tablets to people who have $500 saved up for an iPad. The logic goes that if they have $500 for an iPad, they have $500 for a Surface. If they sell at $300, well then it's easier to upsell them the keyboard case and still get close to the $500. At $99, even with a keyboard, a copy of Office RT, and a service plan, they're still leaving about half the money on the table, and in doing so, reinforcing the mindset that "A Surface is only worth 1/5 of what an iPad is worth". Sure, it will get Surface units in the home, that will be used for Internet Explorer and Netflix and...basically nothing else. This is great for the customer because it doesn't tap too much into the money they had saved up for the iPad...but they'll never get a Surface2 at $499, "because Surface tablets just aren't worth that much money, otherwise Microsoft wouldn't have sold first gen units for $99", the logic goes.
Microsoft could probably make $901 million by selling those tablets for ($901 million / quantity in inventory) and do better fiscally with the first gen units than by just taking the writeoff. The problem is that the marketing division knows that premium brands never dilute their influence by committing acts of desperation. Microsoft doesn't want to simply gets units in hands, they want units in hands that have already parted with enough money to mirror the margins that Apple makes on their hardware. So long as this is the case, you'll never see a fire sale.
Again?
Why do people keep pushing this bullshit?
can't recommend it. I have a friend who's looking for a tablet, I can pick up an RT for him for $199. Won't do it, because at some point he's going to want to install some Windows app on it and he'll be pissed at me when he can't. Apple did a good job of marketing the iPad as a fat phone rather than a thin laptop, people get it. MS can't pull that off because nobody has or wants Windows phones, so they don't "get" what the RT is supposed to be. And making two devices called "Surface" that run different OS's isn't helping, nice going geniuses.
Never let a lack of data get in the way of a good rant.
there's one surefire way to
Right, because no one else but you has ever thought about it, done some calculations, asked a few experts or (gasp!) customers, and ran the scenario. Least of all the people who just took one of the largest stock dives in their history and wrote off more money than you will ever see in your entire life.
Why was this piece of crap posted to the frontpage, instead of some unknown blog with 5 readers, where it belongs?
Assorted stuff I do sometimes: Lemuria.org
Extracting value from tax payers to the tune of $900M.
This is one way corporations don't pay any taxes. You take the risk, we take the profits.
what I was thinking. Relatively powerful Linux tablet on the cheap. I would be in for at least three of them.
I think the only reason this article was submitted was because the submitter wants to score himself a cheap tablet.
Remember those 'hilarious' books. A flash cartoon based on the same concept (multiple deaths selected for a naked busty cartoon lady) actually got a politician and his secretary sent to prison (in some politically correct hell-hole nation) for distributing links to the it on his website.
Anyway, I'm sure you get where this is going. 100 uses for a Microsoft tablet (that make more sense than attempting to use it for computing).
Seriously, Microsoft LOST its last feeble attempt (it had tried at least 4 times before) to enter the tablet market. At first it had a chance. The ARM tablet was supposed to EXPOSE full blown Windows (for some .NET, and recompiled apps). Then Intel offered to pay billions if Microsoft cancelled proper Windows on ARM, and a competing faction rose to power inside Microsoft on the back of this offer. This faction won out, Microsoft took Intel's money, and the RT tablet was repriced vastly higher than originally intended, and given the crippled RT interface for ALL third party apps (full blown Windows is actually still present under the hood).
Microsoft had a tiny window (hoho) of opportunity, and now it's gone forever. They could give away their junky unlovable tablets, and it would change NOTHING.
Have you people NOT seen the specs of Google's new Nexus 7 launching at the end of this month? Qualcomm is the new Intel/Nvidia. The SoC in this Nexus 7 is staggering. Amazing display. 4GB of RAM. And it costs 150 quid inclusive. Wintel isn't even on the same planet when it comes to mobile, let alone RT.
Remember those amazing early days of GOOD PC technology? The 386 -> 486 -> Pentium -> Pentium 2. The Gigahertz wars with AMD. The introduction of proper dual core and x86 by AMD. And then things stagnated, as corrupt high management took control at AMD (killing all innovation for 4+ years),and Intel sabotaged the usefulness of 4-core CPUs when it realised it would make far more money artificially keeping single and dual core systems popular.
Anyone running a Core2 system with 4GB has a good enough machine for 99.99% of tasks, and that's what? a six+ year old design. In fact PCs have got faster on older hardware by moving much of the screen render work to the ever cheaper GPU, and by the fact that Windows7+ has much less crappy multi core and memory management functions.
But here's the thing. Once again, Microsoft tablets were very very crappy forms of the PC. What runs well on the traditional PC runs like crap on a truly mobile PC device. You can try to fix this by paying Intel thousands, but the mega expensive ultra mobile devices are still crap compared to a proper PC.
So Microsoft sez- but RT is built for 'cheap' (hahahahaha) Windows tablets, and allows apps to run 'well'. Maybe so, but why bother with RT in the first place when it is NOT Windows, has ZERO advantage over Android, offers a millionth of the apps, and is found on inferior devices costing more than twice as much as much better Android ones?
Give away those crappy RT surface tablets, and what happens? Tens of thousands of people need to find new drawer space to hold a product they will never use. Why would they when the new Android tablets are so killer, so cheap, so exciting, so 'of-the-now', and so packed with applications? You would have to be mentally defective to imagine price could have an impact on Microsoft's success now.
BTW the HP touchpads were a post-sale disaster. Oh, sure, everyone wanted one at the time, but no-one appreciated how quickly Android hardware/software development would progress, and just how quickly ever better tablets would sell for ever lower prices. Today, the people who failed to buy a discounted touchpad thank their lucky stars.
Wintel is done. None of the traditional PC giants are protecting their home turf. They are each proud to disrespect the traditional PC marketplace, and this is a disaster for them. They are like old men off chasing the young skirt now that school is out for the Summer. Wintel could have enjo
Some things just need to die.
They must do two very important things.
1. Give me the same email functionality that I have with my iPad. Seriously, why do I have better connectivity to Exchange (multiple accounts) on an iPad than I do on a Surface Tablet.
2. Microsoft needs to start writing Apps. There are so many good productivity apps and games for iPads and Andriods but for the most part do not exist on Surface or Windows Phones. I have a Nokia 920 and would not have purchased it had Angry Birds Star Wars not been available. They need to build a base of good apps that don't crash to pull more developers in.
Those two things and I think they will start to gain Market Share.
Part of the UEFI spec means the ability to turn off secure boot.
What happens when it's time to start actually making money off the thing, and you have to hike the price back up to $400-500? If you're eating a couple hundred bucks loss per unit, you can't exactly make that up on volume.
They should just sell it for the cost of materials and assembly. If that came it at around $199 then people would buy it up like crazy.
I would by one and use it as a coaster. Or as a cutting board. The only usage this piece of garbage has.
And when it will be destroyed by beer and my japanese knife, I will see if it blends. And then if it burns.
"Call it the TouchPad Strategy: cut the price of Microsoftâ(TM)s struggling tablet to pennies on the dollar, and watch the sales spike."
The point is to make MONEY, not SALES, you fucking idiot. Calling it "the TouchPad strategy" might make it SOUND neat, but it does not actually MAKE it a good thing, any more than someone would want to use "the Napoleon strategy" for fighting the Russians in winter. There are certain times when you do a "loss leader" to gain a little ground, but it's not the answer to everything.
Apple has sold over 100M iPads. (As of October 2012, the first number I could find -- probably closer to 150M by now.) MS could dump those six million Surfaces on the market for FREE and their share in the tablet market would jump from close to zero percent to MAYBE five percent. Woo hoo.
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We've all heard the old joke about losing money on each sale but making it up in volume, but this is the first time I've seen someone actually propose it as a serious business plan.
The HP could be easily rooted, and you could install Android ROMS on the tablet. The RT tablet is locked down, HARD. Good luck trying to get anything other than stock Windows RT running on it! No, I wouldn't take one, even if it were free. The platform is an unmitigated disaster, and there is NO good software for it. I would rather lug a Kaypro CP/M box around than use this abomination.
If you have to dump, stop making it. The only exception is if it feeds another segment of your business that you do make money on (ink for HP, content for Amazon)
Why not make one I'd buy? Hand hold able. Better ratio. Screen that doesn't suck in portrait. $99 Xbox to feed to my classroom projector. Etc.
RT has a lot of potential, MS just sucks at hardware.
Animated placemats.
pretty funny coming from a site spilling other people's HARDWARE SECRETS
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
he devices would fly off the shelves so fast, the sales rate would make the iPad look like the Zune.
I'll not even go into how bad of an idea that is for Microsoft, everyone has covered that already.
But this shows a tremendous lack of understanding of the current market also. There are estimated to be around four million unsold Surface RT tablets, right?
Well guess what, just *last quarter* Apple sold 19.5 million iPads!! Even if the Surface flew off the shelves, it would in no way make iPad sales "look like a Zune", it would merely make iPad sales look amazing.
It simply does not work to bankrupt your way into market share, doubly so when you aren't even getting that much market share in the firesale.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Pay CBS large sums of money to feature the third-rate crappy products in their primetime lineup, with the hope that by shoving them (and their crappy OS) down everyone's throats it will catch on. For a blatant example, see Under the Dome for 7/22/2013.
Great plan.......for me to poop on :)
-- L8R, guitardood
If that's the best they can come up with then I can see why they have $900 million worth of crapware floating around in their warehouses. Their version of a "radical plan" looks to the rest of the outside world like "sheer desperation."
*I* sure as hell wouldn't buy a Surface at $50. To paraphrase Mr. Burns, "No, I'd be happier _with_ the $50."
...to talk about what OTHERS should do with their money. typically posited by people with no money of their own
Just lowering the price of SurfaceRT seems uncreative. A better plan would be to give it away for free with a two year subscription to something like a "Microsoft Premium Services Plan" with a monthly fee of say $29 that would include a stuff like: extra SkyDrive storage, a Skype local calling plan, an upgraded subscription to Office 365, and whatever else they can think of. Microsoft could turn a profit over time the way cell phone carriers do when they essentially give away smart phones, and the subscription would drive users to their online properties. All consumer hardware margins approach zero over time anyway so just skip to the end game and focus on selling services.
You're not going to save a billion dollar boondoggle by lowering the price and wasting even more money trying to shift a product people don't want.
Microsoft should sell haswell based windows 7 touchscreen devices, or windows 9 if it doesn't suck. And go from there.
Windows RT is a double dose of failure. ARM Soc's are fine, but it's not really a great product on the legacy compatibility side of things (which is a big deal for windows) and since no one is compiling for windows ARM it's pretty much a dead end. And windows 8 is a disaster. Doubling down on double failure is not a good idea.
The only way MSFT wins is if this is a hugely successful market share grab which helps drive their App Store and I don't see that happening, even at a $50-$75 price tag.
Say MSFT sold, I dunno, a million Surface RTs as a result of this theoretical fire sale. Say 5 million. Say 10 million (and I seriously doubt they have more than a few million to sell, but who knows).
Everyone knows intuitively they wouldn't sell that many. They might sell 2-3 million at the fire sale price but that doesn't seem likely. They will be losing a ton of money on each sale and it's imperative they sell a LOT to make it worth their while to eat the hundreds of millions in losses that they've already taken and will continue to take if they sold the Surface RT so cheaply.
It would take YEARS - 5 or 6, probably- to recover the losses unless the App Store grew exponentially each year. And who, honestly, sees that happening? The much greater probability is they will never recover the losses. It's throwing good money after bad, essentially.
MSFT usually has very bad luck with their own hardware (Xbox and mice and keyboards possibly excepted) and, as with the smartphone market, they're trying to break through a marketplace that already has one premium and one super-cheap player.
I'll give Microsoft credit for recognizing that they're at a fundamental turning point in the world of PC computing. They cruised to dramatically successful domination of that market over 30 years. Though mobile and tablet computing is largely passing them by they still have an opportunity to make their mark however the crucial difference now is that they no longer have the de facto stranglehold on the platforms they came to dominate. For example, they dominated the desktop OS market when say a Lotus had the dominant spreadsheet or Wordperfect the dominant word processor. They could plod along for years and years steadily making the Office suite better until 6-7 years later they effectively swept those products off the market. Likewise with Windows - yea it sucked and sucked for years but they owned DOS which owned the PC computing world and eventually, bam, created a decent windowed GUI with Windows 3.0 and steadily, more and more, just dominated the GUI world in desktop computing.
But our information consumption devices have fundamentally changed from Windows' laptops to mobile phones and tablets. Remember it's been barely 5 years since the iPhone came out. Blackberry and Microsoft who once had a stranglehold on the smartphone that existed at the time (mostly RIM though MSFT had a strong presence with Windows Mobile) are scrambling to be relevant in a very, very short time. I mean RIM basically spent the first 3 years of the last 5+ living in denial that the iPhone was going to knock them off their perch. Then they're been scrambling to develop a competitive smartphone GUI and OS to iPhone and Android and it takes almost another 3 years to make that happen. Same with Microsoft. These large, lumbering companies just didn't see it coming until long after it was clear that were getting killed.
On the flipside, people will always need information *creation* OSes and environments - but the pace of that need and growth is dramatically smaller than the pace of tablet and smartphone growth. These days it's quite feasible for a 5-8 year-old computer to run XP or Windows 7 (or Windows 8 for that matter). Laptops cycle out pretty quickly but desktop hardware can get pretty long in the tooth before it needs upgrading or refreshing. Windows 8 tanked for a lot of reasons but the biggest one is no one really wanted a touchscreen UI in their desktop OS. MSFT did make a dramatic bet with Win8/WinRT/SurfacePro to have a consistent UI across all platforms - and frankly it's a pretty innovative, daring, all-in type of bet on Microsoft's part - but it would have only worked if they were already killing it in the smartphone and tablet marketplace. Clearly, they're not and they're now scrambling to try to be relevant in reverse.
... is relevant.
Microsoft could sell the stock of Surfaces at a low price.
Sell the RT cheap and then charge for apps - it's a good model and might work.
they will forever destroy any chance of ever coming back.
Why would having an established market base driving new application development "forever destroy" them?
This plan to "save" them would result in the platform having no future. If the only way people will buy them is at a loss for Microsoft, then Microsoft won't be making any more.
"Sure, we lose money on every sale, but we'll make it up in volume!"
So many people in the tech world seem to think that products are priced randomly and that if a company really wanted to, it could sell them at half the price and still make money. The truth is that the Surface RT was priced as it needed to be for Microsoft to make a decent margin on the hardware. Now that the price has been cut this drastically, the odds are strong that there's no profit (and they're probably even be losing money on each unit). So to claim that this is a way to save the device is to assume it should have lost money from the beginning. Although Microsoft is clearly willing to take a discounted price right now — because the alternative is not selling them at all — pricing this product at the current price would have been a financial disaster because it would have let the public believe that this was a "fair price" for such a product. It can't be profitably built and sold (at the current quality level) at the fire-sale prices you're seeing now. So it's silly to think this is anything more than a way to recover some of the huge amount of money that's been lost ona product that never made sense in the first place. To suggest it as a business plan is to prove that you're completely ignorant of how financial reality works.
Port XP to it, and keep maintaining both ports of XP. OK fine, you need money. I wouldn't mind paying a modest yearly subscription, say, $30/yr to keep my XP patched past the EOL drop-dead date.
Stage two; military contract! Five hundred to a thousand percent higher in the new repurposeing project of considerable military significance. These projects are always deemed top secret and national important therefor no contract information is allowed release. No bid process is required, and pricing is only posted within a very vague column that reflects an ambiguous lump sum total hidden within a megalithic number inside the posted the national debit figures. All under the label; National security! These new units will only to be found as the ultimate users the military begin tossing this stuff overboard at sea, or out of their jeeps on land, and hiking them out the door of their helicopters in the air within the theater of the next war because they still won't work. Looks like 2014 will be a banner year for Microsoft. I recommend buying stocks as there is nowhere but upside in this deal. Odds are high that the new entries into this temporary vacuum will somehow be owned by Microsoft or their product will not meet some standard, or fail some health issue, or be labeled as endangers. Coincidentally, this has already begun. Question; What makes people go to the movies and how can the government create laws laws that will force patronage? Anyone?
"If Microsoft went that way, then for a few hundred million dollars they would forever destroy their chance to ever crack the tablet market" .And that is a bad thing?
Either Microsoft have done security right for the first time in their very long history of bad security, or it's hackable. I'm guessing the last option is more likely.
Some Linux varient on that hardware might be pretty nice.
I have an exploit that can be used for this purpose that I've been keeping secret. I just need to wait for the right opportunity to come to use it.
"Screw Sun, cross-platform will never work. Let's move on and steal the Java language." - Visual J++ Product Manager
Sure, it will get Surface units in the home
Which would increase market-share. Which could then attract more devs. Which would result in more apps. Which would result in somewhat more of a reason to buy one of the damn things...
In Windows 8.1, Microsoft actually made significant changes just to lock down Windows RT more strongly. They created a new type of "protected process" that protects csrss.exe from debugging, which is exactly how the RT 8.0 jailbreak worked. They clearly spent a lot of engineering resources to do this.
I have a thread post here describing some of the changes in 8.1 that were clearly designed to target RT's jailbreak, for they have little other practical use.
"Screw Sun, cross-platform will never work. Let's move on and steal the Java language." - Visual J++ Product Manager
sure ignore the sunk costs, but there are future tech support phone call costs, even for free hardware
every minute spent talking to owners of these devices, every minute spent figuring out what to say to them, is money down the drain
Even if MS did pull a fire-sale and dropped the price to $100, it wouldn't compare to the HP Touchpad fire-sale of 2 years ago for these reasons:
1. 2 years ago it was near impossible to get a decent tablet for under $200. In the past few weeks the Nexus 7 was on clearance for $150. Decent, no-name Android tablets can be found for under $100.
2. Far more people now already have a tablet in their household to play with. When the Touchpad dropped to $100, for many people (myself included) it was a golden opportunity to try out the whole tablet experience at a no-brainer cost. I suspected I really had no use for a tablet, and for $100 I was able to dink around with one and prove myself right. I and others like me don't need to do that again, especially given the next point...
3. It was practically certain when the Touchpad went fire-sale that it could be made to run Android, thus guaranteeing that the tablet would have a life regardless of what happened with webOS. This isn't the case with the Surface RT, and I don't see Microsoft making it easy to change this, even if it could save them millions of dollars.
4. It's Microsoft, and given the number of customers they've pissed off, there are a lot of people who just want to give them the finger.
I'm not saying Surface RTs wouldn't sell at $100 - I'm just saying there wouldn't be anywhere the kind of craze to get one like there was with the Touchpad. Even at $50, I'd still be asking the question "But can it run Android?"
www.gaiageek.com
If they recognized how deep the shit was but wanted to be humble and survive there is a direction where they could actually _raise_ prices.
The volume would be a lot lower, but there's a nascent market for these devices that's already there for the taking. That's not a contradiction.
They need to make them larger and supply the Kiosk and Digital Signage markets. It would also be a big help to MS SaS/Cloud.
Seriously. Dell is an important vendor in the Kiosk and Signage segments and MS could eat their lunch
in a heartbeat, but there's a short window of vulnerability (no pun) since Dell is releasing Android on an HDMI dongle.
It would also be bad for TYCO (ELO) since they supply a majority of touch screens.
This story has resurfaced (no pun intended) like 10 different times on /. in the past week, with slightly varied headlines.
Who gives a shit about this anymore? Give us something we don't already know.
I once watched some documentary about MIPS (they design MIPS cpu archtecture) and one of their CEO said:
volume is always more important then margin.
Heavily discounting the Surface RT would train customers to buy under the $100 price point, something no one wants to do except for tablet makers who use the tablet as a loss-leader to sell DRM content. The last thing MS wants is a race to the bottom, where whoever gets under $100 wins. MS wanted to compete in Apple's space, where entry-level devices are hideously expensive, and they gouge you for anything optional like an ethernet card or keyboard. So, MS would be better off blowing up its warehouse full of Surface RTs than they would selling them under $100. No company can sell hardware at a loss, or a break-even point, unless they make their money off of something else.
Just install XP on it!
The "Touchpad Strategy" didn't even save the Touchpad, it just cleared out inventory. It's not a bad way to go when you're throwing in the towel and trying to cut your losses, but you're not "saving" anything, other than a few bucks.
Never let a lack of data get in the way of a good rant.
Sell at a loss, and make it up on volume?
"National Security is the chief cause of national insecurity." - Celine's First Law
This "cycle" of Microsoft products is already deader than a Door nail.
The nail in the coffin was the Hostile approach to developer and customer input.. worse they are erroding trust in all their platforms by falsly appealing to their patience and paying obvious lip service to feedback requests.
The "Emergent" thing about Microsoft products of lore. Be that Office or Win16 or Win32 et.al. was unbeknownest to them citizen hackers using OLE. VBA, an API ect.. twiddling away even in Excel developed popular apps "in spite of" efforts by the Professionals paid to develop apps by Microsoft. A Popular Community arose that favored their products by word of mouth.
Microsoft got full of itself and drank the Koolaid.. they were a Marketing company and Holding Company that begain to believe in Good-hood and then hired professional Ignorers claiming more productivity through Arrogance.. offering Apple CEO as proof..
After the API and OS is baked and undocumented.. ahem.. "the code is self documenting".. what little "enablement" they could have offered is gone.. the Microsoft "coders" are disbanded.. the develoment teams off to raising famalies or counting their millions.. there is no incentive or capability to throw good money after bad.. its over.. Win8, WS2012 are toast.. done.. fini
Next Cycle whether marketed as Win 8.1 or "Mystical Browser Support OS 9" will be a whole new crew of freshmen at MS.. and offer hope for the future.. but its unlikely.. this time.. its more likely they will get radical to try and shift the Titanic.. its more likely to list and rollover.. pity.. they would ahve to do suprisingly little to right the ship and make lots of money.. is the freaked panic of trying to do something that will make things worse off.. its more about what goes on outside the company than inside that makes its profits.. which is frighteing to them.
I think the RT has a place in the market, but MS priced it way too high to begin with. For $300 with keyboard and allowing installation of non-MS Store apps could make this device useful. It comes with MS Office with OneNote (albeit crippled without the ability to record meeting audio). This could have been a great, affordable tablet for business users and students.
MS didn't include Outlook; didn't include the killer sound recording feature of OneNote - instead recommending running a sound record app while taking notes - WTF?; made it difficult for PuTTY or apps like it to even consider porting to the platform - see http://www.chiark.greenend.org.uk/~sgtatham/putty/wishlist/winrt.html
Other smaller issues like going with 16:9 instead of 16:10 makes trying to read a document in portrait orientation difficult. MS might have had a tablet for masses and students,but managed to fumble another opportunity by trying to out iPad the iPad.
The tax write off + PR is probably more valuable than any revenue generated by dumping them all.
I am very small, utmostly microscopic.
They could try selling them without warranty or with a very simple 30 day exchange warranty for defective products, but that could leave them with a PR problem when people run into problems with no way to resolve them and the blogs start filling up with complaints about how Microsoft sucks because they won't stand behind their products.
Then why do you see all this happening on eBay and the like all the time. Hell even Apple was doing it at one point [1]. No one cares about warranty at that price, which is a significant discount. If they do, they get "corrected" and there's fuck all they can say about it (see what happens with other gray-market sales).
The only thing standing between Microsoft and an eBay store auctioning or selling off the remaining stock is their pride and image. And that's a mighty hefty price even for Microsoft to pay.
[1] http://www.redmondpie.com/apple-now-selling-refurbished-products-through-an-ebay-outlet-store/
Make sure everyone's vote counts: Verified Voting
Companies can be pretty dense, seems everyone takes an "all or nothing approach" to new products. Sure the useful idiots out there sometimes can be lead by their noses with shiny things, but I don't get why didn't MS just simple come up with a very good product and build a following around it, I don't know sort of like apple did a while back (they are at the shinny products stage now and can' figure out why their sales are tanking) and slowly take over the world.
The surface is a great idea but it is a half court jump shot that is probably not going to even hit the backboard much less go in.
Allow network domain participation and authentication. Bundle in full versions of Office. Heavy discounts year over year.
Maybe $50-$100 with an 2 year data plan
At least they would be _receiving_ a few hundred million dollars for destroying their chance to sell future products, that would make a change from _paying_ hundreds of millions of dollars to management for destroying their chance to sell future products.
I think I can save the value in Microsoft's warehouses, but I have a question first:
Does it run Linux?
Oh. Oh. Secure what? Oh. Are you sure they have ARMs? Oh. And they really wrote that into the contract? Ok. I see.
Never mind, these paperweights are worthless and cannot be saved.
"Believe me!" -- Donald Trump
Windows for ARM was and still is a great idea. But Windows RT as they implemented it was incredibly dumb from the get-go.
MS: "Why don't we offer a 'pure' ARM tablet experience, but throw in the desktop anyway since we can't manage to fulfill our own App Store restrictions with Office. But at the same time, we're too disorganized to come up with an emulation layer for x86 so let's disallow all desktop apps for ARM (except for Office, but screw all other developers)! That should go over great!"
Consumers: "OK, so this machine has great battery life but only runs a fraction of the apps of either Windows 8 or Android tablets? And yet it still includes a misfit desktop mode that's totally useless for anything but Office? WTF???"
take the hit and dump them. Might help build an ecosystem. Can't hurt. If giving someone a $200 discount gets them into windows tablets the next phone might be an easier sell, the next laptop might be a shinny touch enabled win 8.1 device, etc. But this is MS they aren't always rational, they'll hang on to them for 2 years then try to dump them for -$200 when they are completely useless even at that price.
for a few hundred million dollars
Since when is $900M not a billion dollars? It cost Microsoft a billion dollars to "destroy their chance to ever crack the tablet market." FTFY
If they do reduce them to $99 or so, I'd get one, just on the off chance someone figures out how to root it and install a different OS.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
With the little tidbit we heard not that long ago about the OS showing adds in the smart search, maybe they are planning on capitalizing on the volume of people using this?
Yeah, you can make em as cheap as you want. But it's still a rubbish tablet with no apps. Unless they decide to unlock the UEFI bootloader security then you cant actually put any nice os of your choice on it. :)
then it would be a nice platform for Tizen
Can the surf-ace be hacked to run Linux?
Yes - I offer $10 per slablet.
No - go away, even for $0.
I'm no big fan of Surface, but I am a big fan of competition. The author is right about one thing: they set the price point too high. But $75 is too low. nobody sells tables at that price. Why not a competitive price, like, $200? Or, since there are so few apps, maybe undercut the competition at $170 or so. That price would be high enough to keep a bit of respectability, while making it attractive to bargain hunters and Microsoft enthusiasts. They might even be able to break even at that price point.
Why sell at a loss? Windows RT has a Microsoft store built into the OS, so Microsoft will make their money back on the store just like Google makes up for giving way Android from Google Play.
You can't really compare Windows RT to Android. Windows RT has fixed component costs and overheads such as warehousing, shipping, customer service, advertising, all expenses Android is free from.
Going by your business model, you could perhaps compare Windows RT to the Kindle. Amazon sells the Kindle cheap to make money from the Amazon store.
To do a price comparison, IHS previously broke down the component costs and concluded that the 32GB version of the Microsoft Surface RT sold for $499 and cost $271 in parts. So, your plan would mean pricing the Windows RT at or below $271.
Will it work for MS though? Bear in mind what the Amazon store offers:-
OTOH, Windows RT can only run custom apps made for it. It cannot run Win programs. It does not have the selection of apps available for iOS or Android. Last I saw, the selection was bare indeed.
MS cannot make money selling non-existent apps it does not have, and barring a sudden increase in products in its store and consumer interest in buying these products, your strategy will fail.
The only thing it will likely achieve is to set consumer expectation that Windows RT is not worth more than the cut rate loss making price it was sold for.
"Sell at a loss, but make it up in volume" has been a failed tactic in business for millenia. As much as people shit on business degrees on slashdot, maybe they need to point their guns at whoever wrote this article.
Jesus was all right but his disciples were thick and ordinary. -John Lennon
Make it just hardware, for people to play and hack on.
See what happened with kinect.
I've only had my RT for a day now, but already it is better than every android tablet I've ever used. It's actually quite good for what it is. The metro ui is well suited for touch screen input and controlling the device is straight forward. Am I going to use it as a dev machine? Not likely. Am I going to use it to read some websites and eBooks, stream Netflix in the kitchen, and send off quick emails here and there? Yeah, definitely.
And before you call me a Microsoft shill, I've been developing Linux based software professionally for the last six years and all my personal laptops, desktops, and servers have been running FreeBSD for the last 12 years.
People who buy a Surface for $100 won't necessarily use it. If they don't use it, they don't increase demand for apps and content for Surface. And $100 doesn't cover the warranty and support commitment Microsoft would have to make.
The only way to compete with iPad is to actually compete with iPad. Make a product that people in iPad use cases want to use more than iPad, so much so that they are willing to pay for it, willing to use it, willing to recommend it.
What Microsoft should do with Surface RT is buy the existing models back and retire the RT product altogether. They could give RT owners a Surface Pro (Intel) and ultimately it would work out better for them because they could regroup their ARM strategy around a Metro-only $250 8-inch tablet that might sell and get used and build a platform.
It's telling that others are competing with iPad so poorly that dumping stock at 25% of manufacturing cost is seen as the only winning strategy. Apple basically took a whole year off from iPad releases (a new model of the 10-inch was due last quarter) and yet the competing products are so bad they all lost popularity during this time when Apple has had its head down.
Imagine Microsoft pricing the Surface at a mere pittance, say $50 or $75 — even in this era of cheaper tablets, the devices would fly off the shelves so fast, the sales rate would make the iPad look like the Zune.
Someone poisoning the water again? Great... They saw Google release for cheap/free... must copy process. Like Microsoft ALWAYS does. Too late.
what about huge outdoor screens of tablets, each one pixel ? (and a lot left over for spares)
In NSA America social networks join you!
1) dig a hole, a BIG hole 2) fill with ALL the MIcrosoft failed products 3) add dirt to top off 4) plant a Lemon tree on the top
Microsoft has been so deeply implanted into the United State government that there is really no way but up on this deal. First the write-off that will ensure little to no tax leakage within the USA. Next, the military contract where this stuff can be repurposed into "Top Secret" military hardware. No bid proses required, no public exposure, and plenty-o-cash. Which at at the very least will be sold hundreds of times higher than it is being sold at currently. A little safety cushion there for Mr. Gates. Never worry the tax payer will be there for a long time yet. This will happen!
Subject says it all.
Birds are not dinosaur descendants;birds are dinosaurs, for all useful meanings of "birds", "are" and "dinosaurs"
While Surface RT is officially declared a failure, Microsoft Japan is now advertising heavily on TV to try to sell them. Even in the age of the Internet, it seems the Japanese public is ill informed of the bad image of Surface RT in the U.S.
The OP could have highlight that the true price of the HP TouchPad was about $320, which is what it started to appear on Ebay for after the $99 selloff. Selloff of the Surface RT might allow for a true price to be found in the market place and allow MS to better price the Surface II.
The important thing though is that having this write off, 6 Million Surfaces will now sit idle. If MS can recover $500M out of the $900M write off it could go along way towards funding a new project but also might be seen as a way keep their name in the tablet fray.
In any case large companies give away stuff for free all the time, it keeps there name in the market place especially if enough people like the product. But free is not really the aim here, with the bad name that Surface RT has a sub $200 sell off could work. MS is also the boss of getting people to love crap, allow enough people to play with it and show them how to use it, get them into their market and WHAM, they are hooked. We know MS strategy, allow us to pay to test their carp then sell us the refined product; consider Win95 then 98 next WinME then WinXP next Vista then Win7 now we have Win8 next ??? MS has a plan.