Tablets Surface revenue less than $900M RT write down

[Rogifan]

According to Microsoft's 10-K filing: "Surface revenue was $853 million". So the revenue for both Surface RT and Surface Pro was less than the $900M write down of RT. Wow, that's pretty embarrassing. I still don't get why Microsoft needs to be in the PC hardware business (besides accessories). They can blame OEM's all they want but really Microsoft's woes in the tablet space can be laid squarely at the feet of Bill Gates and Steve Ballmer. Microsoft getting in to the hardware business isn't the solution IMO. Unless they did so because they're worried about OEM's ditching them for Google?

 

[spinedoc77]

According to Microsoft's 10-K filing: "Surface revenue was $853 million". So the revenue for both Surface RT and Surface Pro was less than the $900M write down of RT. Wow, that's pretty embarrassing. I still don't get why Microsoft needs to be in the PC hardware business (besides accessories). They can blame OEM's all they want but really Microsoft's woes in the tablet space can be laid squarely at the feet of Bill Gates and Steve Ballmer. Microsoft getting in to the hardware business isn't the solution IMO. Unless they did so because they're worried about OEM's ditching them for Google?

It's not that they got into the hardware business, it's that their strategy was deeply flawed. If they just released a windows tablet with an atom processor as the basic surface model I think they would have done MUCH better. You cannot deny that MS made a VERY impressive and compelling hardware product, something much much better than any OEM, better than Google, and at the very least on par with the ipad if not nicer in many ways. Unfortunately the RT strategy was fatally flawed and destined to fail, and the Surface Pro strategy is more of a niche tech enthusiast product, although the surface Pro 2 will be interesting.

I'm very concerned that I've been reading that since they dropped the price on the RT model it's been sold out in a lot of places. RT needs to die and every single RT unit they sell means one more consumer who is confused why he doesn't have "real" windows on his tablet and one more consumer who is going to be majorly pissed when Microsoft deserts RT in the near future.

 

[Rogifan]

It's not that they got into the hardware business, it's that their strategy was deeply flawed. If they just released a windows tablet with an atom processor as the basic surface model I think they would have done MUCH better. You cannot deny that MS made a VERY impressive and compelling hardware product, something much much better than any OEM, better than Google, and at the very least on par with the ipad if not nicer in many ways. Unfortunately the RT strategy was fatally flawed and destined to fail, and the Surface Pro strategy is more of a niche tech enthusiast product, although the surface Pro 2 will be interesting.

I'm very concerned that I've been reading that since they dropped the price on the RT model it's been sold out in a lot of places. RT needs to die and every single RT unit they sell means one more consumer who is confused why he doesn't have "real" windows on his tablet and one more consumer who is going to be majorly pissed when Microsoft deserts RT in the near future.

You think Surface is better than some of the convertible products from Lenovo, Asus, Samsung, etc.? Why?

I agree with you though...RT needs to die.

 

[Liquorpuki]

You think Surface is better than some of the convertible products from Lenovo, Asus, Samsung, etc.? Why?

I agree with you though...RT needs to die.

Spinedoc has actually used a ton of those Win8 devices

Personally I'm all in on the Surface Pro - it's been my goto machine since Feb. The Wacom digitizer + OneNote is a killer feature for me, I'm typing on it right now.

RT sucks though. I knew it would fail. Strategically it was MS's attempt to create an ecosystem on ARM (which is actually kinda smart considering nobody knows who's gonna win the ARM vs x86 war), but their execution and marketing was horrible. They're making the same ecosystem mistakes on RT that they did on WP8 (except with WP8, Nokia is picking up a lot of the slack so it doesn't hurt as bad).

RT second gen will fail too but the Pro with a Haswell CPU should be awesome.

 

[MRU]

I posted this in the other news thread, these are my thoughts really as to why the Surface Pro hasn't shifted in the numbers we expect of 'tablet' makers....


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The problem with Surface (pro as that is the model the article is about) is the actual association with the word 'tablet'.

Tablets are either synominus with Apple iPad or much much cheaper Android tablets. Folks just do not associate full computer and tablet together.

Compare a $329 iPad mini, $499 retina iPad or even a $200 nexus 7 and $1000 for a what they deem a 'tablet' (not a computer) and it becomes pricy.

Yes the surface pro is much more than these other tablets - but the fact that its associated with the word 'tablet' at all means it is going to be directly compared with them on the basic level of what majority of users want tablets for. The average Joe Soap who is in the market for a 'tablet' doesn't necesserily want 'laptop or Ultrabook specifications' or even workload. The fundemental usage of the product is different, most people don't want the tablet to do more on it than the $200 nexus 7 (remember Android and very cheap Android tablets are the bigger percentage of tablet marketshare)...

So yes the surface pro is one of the most impressively powerful 'tablets' on the market - but clearly based on sales alone - incredibly powerful tablets are an incredibly NICHE area.

Surface Pro needs to drop the marketing towards the tablet crowd altogether and go after the high end - Ultrabook market.

Aiming at college Students in their commercials is silly, when most students / college goers would happily pay $399 for a cheap laptop for college for study / word processing and $200 on a cheap tablet for browsing / gaming and still be $300-$400 better off finacially than buying a surface Pro.

Microsoft simply got the market wrong on this one.

Its the reason why those expensive windows tablets of the past never made a dent in the market - fundamentally the surface pro is just like one of them. And the market for that item is just not that big....



What would be interesting is if we could see how many surface pros were sold against some of the other Ultrabooks on the market

 

[spinedoc77]

You think Surface is better than some of the convertible products from Lenovo, Asus, Samsung, etc.? Why?

I agree with you though...RT needs to die.

No I think the atom based products are MUCH better than the surface Pro, and ANYTHING is better than surface RT. The consumers who truly need the power of the surface Pro and are willing to accepts its massive limitations are very few and far between.

Edit: I think atom tablets are better as an all around package, BUT... I think the surface hardware itself is extremely nice, ie the housing, screen, etc etc. My point was that if we had the incredible hardware that MS created coupled with the long battery life and ability to make a thin device that the Atom processor have I think we would have been seeing a much different sales story.

----------

I posted this in the other news thread, these are my thoughts really as to why the Surface Pro hasn't shifted in the numbers we expect of 'tablet' makers....


---
The problem with Surface (pro as that is the model the article is about) is the actual association with the word 'tablet'.

Tablets are either synominus with Apple iPad or much much cheaper Android tablets. Folks just do not associate full computer and tablet together.

Compare a $329 iPad mini, $499 retina iPad or even a $200 nexus 7 and $1000 for a what they deem a 'tablet' (not a computer) and it becomes pricy.

Yes the surface pro is much more than these other tablets - but the fact that its associated with the word 'tablet' at all means it is going to be directly compared with them on the basic level of what majority of users want tablets for. The average Joe Soap who is in the market for a 'tablet' doesn't necesserily want 'laptop or Ultrabook specifications' or even workload. The fundemental usage of the product is different, most people don't want the tablet to do more on it than the $200 nexus 7 (remember Android and very cheap Android tablets are the bigger percentage of tablet marketshare)...

So yes the surface pro is one of the most impressively powerful 'tablets' on the market - but clearly based on sales alone - incredibly powerful tablets are an incredibly NICHE area.

Surface Pro needs to drop the marketing towards the tablet crowd altogether and go after the high end - Ultrabook market.

Aiming at college Students in their commercials is silly, when most students / college goers would happily pay $399 for a cheap laptop for college for study / word processing and $200 on a cheap tablet for browsing / gaming and still be $300-$400 better off finacially than buying a surface Pro.

Microsoft simply got the market wrong on this one.

Its the reason why those expensive windows tablets of the past never made a dent in the market - fundamentally the surface pro is just like one of them. And the market for that item is just not that big....



What would be interesting is if we could see how many surface pros were sold against some of the other Ultrabooks on the market

They could target both demographics, the consumer who wants a cheap tablet with an atom powered surface, and the high end, tech/business user with the surface Pro. You're right though, MS put all their marketing power for the mid end consumer into RT and it backfired on them big time. They say hindsight is 20/20, but some of us, like myself, have been saying this ever since it became clear what RT was way back when. Microsoft is just making some bad decisions, and what's odd is it's not even a grey area, it's pretty cut and dry and obvious that RT was going to tank.