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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."
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..
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.
Dear Slashdot: next time you want to mess with the site, add a rich-text editor for comments.
Wow, if that isn't about the shrillest over-reaction to image linking I have ever seen...
What assholes.
They just assume that they could steam roller the world into liking a product that no one wants. They were told repeatedly during the beta cycle that metro was problematic at best. MS refused to listen because they to have the damn tiles. MS forget that they are no longer in the same space as apple and Google. Not only was it totally unacceptable to Businesses who are their primary clients and purchasers but to the general public. the people who like it are those who would have liked it regardless and are so small in number that its not economically feasable to do so as we all saw.
As for dumping a built unsold product that they have already taken a write off for, any more is better than no money. Sell for $99 would hurt but people would buy them. Unfortunate RTs are a locked ecosystem so they would be still half useless.
Microsoft needs to accept the fact that their code is way to large now but they can't change it either. The windows 7 style is the only way it will sell. (actually had they flips it. Had default to the desktop, turned Metro into a new start bar and allowed the live tiles to be a choice, it would have flown off the shelf. IT is very stavble and has a host of good updates. Its just Metro is in the way. Since surface RT is all metro, that is the cheif problem.