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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...
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!
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.
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."
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
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
"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?
That would work, if a person were to buy those 6 million (?) units and run them all through a "rebranding". The secure boot isn't an issue if you re-flash the CPU. They'd also need some new packaging.
The determined Real Programmer can write Fortran programs in any language.
Why not just unlock (via patch or something) the boot loader, so that you can load Android/Linux or GNU/Linux?
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.
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.
You can't do that. Microsoft can, but they would have to remove the secureboot restrictions preventing you from installing a 3rd party OS on the device. I really doubt they're going to suddenly decide that Google's dogfood tastes good, so that will likely never happen.
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....
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.
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..
Now if you find a way to hack the UEFI secure boot loader....
Not quite. If you can find a security hole in the Windows kernel that allows arbitrary code execution in privileged mode (not as easy as some Slashdot readers like to believe) then it's possible to bypass UEFI secure boot by making the Windows kernel into a chain bootloader.
I am TheRaven on Soylent News
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.
There's no "port" involved. Or rather, they already did that. Then they added literally one configuration change to lock out non-MS-signed desktop apps. One change. It's a single flag in the kernel. On x86 and x64 builds of Windows NT, it's not set. On ARM builds of Windows NT (RT and WP8), it is.
Clear that flag (which is what the current "jailbreak" hack for RT does), and you can run any desktop software that will compile for ARM, or any .NET program, or any other language that can be run through one of the others (for example, Java is possible through IKVM, a .NET program implementing a JVM).
Now, as for domain joining, that's actually a simpler problem. All versions of Windows NT have had multiple SKUs (editions) ranging from the do-anything highest-end Server builds to the very crippled Starter builds. It's all the same codebase, just a configuration change. RT falls somewhere between Win8[Home] and Win8Pro SKUs in terms of business-y features; it can use BitLocker encryption (usually not available on Home) but cannot join domains (usually available on anything *except* Home).
Working around that particular restriction is also possible, though it is not easy unless you also remove the signature enforcement ("jailbreak") at which point it becomes nearly trivial.
Oh, and there's already a (very early and still incomplete) x86 emulation layer (actually, dynamic recompilation) for "jailbroken" RT devices. It's slow, as one would expect, but it can run old games and desktop software just fine. It also is the work of a single homebrew developer working from public documentation and reverse engineering for the Windows interoperability (calls to system libraries are thunked to ARM code, which is both faster than using x86 libraries and requires less install space). Microsoft could do a better job easily by putting a few of their people who previously worked in that space (for example, the "Virtual PC for Mac" software worked the same way, some of them are probably still around) on the job.
There's no place I could be, since I've found Serenity...
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.
It's not called "Dumping" it is called "Liquidating" - There is a difference..
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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.
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
Sorry to self-reply, but in case it isn't obvious from the previous post: Microsoft could "fix" RT with a single, simple update. Reboot the tablet and the restrictions are gone.
An official x86 compat layer would be a fair bit of work, of course, but it's not really necessary to do that; the simple ability to run .NET apps (and maybe they get a few of their more important partners to flip the Platform option in Visual Studio to "ARM" and hit Build again; often it really is that simple) would make RT a lot more appealing.
There's no place I could be, since I've found Serenity...
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..."
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.
Part of that was because you could upgrade the Mac XL to way higher specs than the Mac or Mac 512k. You could jam 2MB of RAM in there, which no Mac was going to get until the Mac II line. Oh, and it had a hard disk.
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
Oh get real. What are the odds of finding a security exploit in the Windows kernel?
The obstacle is getting an unsigned ARM image to load. Surface has been unworthy of the challenge at its original price. Android pads are like a date in the Tenderloin: cheap and easy (and likely male :-) ).
But a near-free WART from MS? That changes things.
"Flyin' in just a sweet place,
Never been known to fail..."
Oh get real. What are the odds of finding a security exploit in the Windows kernel?
Yea, it would probably be a lot easier to just buy a couple off a rogue NSA agent.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
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.
Links?
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
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
Problem is you may not be able to bypass the secure loader. Look at the tear downs for the normal RT and it looks like you're not really going to get easy access to the roms. None of these tablets are designed to be repaired or modified, ever.
RIM was trying to bump start the Playbook. I think that Microsoft is trying to bump off the RT tablet.
Faster! Faster! Faster would be better!
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/
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