Microsoft's Failed Surface RT Strategy Leads to $900 Million Charge on Unsold Inventory

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praack

in reality RT was windows 8 until microsoft decided to paste the front end onto the desktop back end,

or was the backend windows 8 until they posted windows phone (rt) onto the the backend- doubt if we will ever know- but we do know it happened. and the Joins were not done well.

How can Microsoft recover? only if they release a seperate line for the tablet/phone/xbox and new one without all the tile nonsense for the desktop

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burntham77

Windows RT's worst enemy is actually Windows 8. I would not blame them for ditching RT and focusing on 8 when it comes to tablets. I've been using an Asus Windows 8 tablet and it's as speedy as any ARM tablet I have used in the past. It's not that RT is inherently bad, it's just redundant.

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maxeeemum

Check out the video and story!

http://finance.yahoo.com/blogs/breakout/microsoft-slammed-9-buy-ratings-slump-20-low-144408236.html

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riopato

Let's face it. Everyone who reads this magazine has a level of fear of what RT represents, the additional nail on the maximum PC's coffin. What exactly is maximumpc about surface RT? Nothing, yet we are reading about it on this website. Consumers are the driving fiscal force for a product's success and the market is leaning towards the dumbificaton of computing with iOS, Android and RT. We already see it's effects on the latest iteration of windows where it's the first operating system that hangs on the balance on developers to actually make apps instead of programs. What will happen if this situation becomes reversed and there will be less of a need for programs and more of a demand for apps? Why would we need to build a maximum pc in order to run apps? Will small form factor PCs be more common place and less novelty since the need to run powerful machines will be a thing of the past? One of the comments suggests that Microsoft should make their console games run on windows instead of waiting for ports. How stupid is this? Will PCs eventually be less ahead of the console technology? Dare I say on par with consoles!

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riopato

Another billion dollar loss that people tend to forget was the red ring fiasco of the Xbox 360 and last I checked, this product is still doing pretty good. People also tend to forget or don't realize the general enormity of how large a corporation Microsoft is and that this multi billion dollar company isn't effected by a billion dollar write off such as RT. The consumer market is but a fraction of what this company bases it's revenue from and those who are saying RT will end this company needs to get their consumer heads out of their consumer arses. Microsoft has the ability to decide when their products die, not the consumer.
Steve Jobs said that Consumers don't really know what they want in a product and it's the Companies' goal to show them what they want. It's a good thing that Microsoft is follow his advise.

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Bullwinkle J Moose

Microsoft is still Number One in Operating Systems

Why if this gimped piece of crap could only run an Illegal copy of XP, it would be almost as popular as their non registered O.S. is Today

Just say no to Spyware Platforms

and "Fuck You Microsoft" pretty much covers it, except..

Get out of my chair Ballmer

and stay out of my office

MY OFFICE!

Yeah you heard me

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Caboose

Why don't you just use something else? Or build your own OS.

I bet the whole NSA stuff has got you pulling your tinfoil hat on even tighter eh?

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maxeeemum

Gotta love it!

What happened to the Windows 8 strategy M$?

DOA! Everything M$ turning to $hit lately!

LOL!

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riopato

If only I could fail like Microsoft, I'd be crying tears of laughter on my way to the bank with my $20+ billion of revenue this quarter. Imagine what they'd be making if they didn't make $hit?!?

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maxeeemum

Baaaaaaaaaaaa Baaaaaaaaaaaaaaaaaaaaaa!

http://www.youtube.com/watch?v=DE_U-ZHr0_Q

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wumpus

Roughly 20 years ago Microsoft actually had to compete with other companies for desktop software. It seems another world. Roughly at that time, they shipped windows 3.1, and had a product that was barely good enough to convince people to leave DOS (hint: if you want to know a great definition of $hit software, look up DOS. Its creator called "quick and dirty OS", and boy, was it dirty).

Since win3.1 actually worked, but was a horrible 16bit kludge that crashed right and left, people bought and used it but weren't willing to commit to it and looked elsewhere. OS/2 2.0 brought pretty much everything everybody wanted in an OS (think more or less like XP), but was wildly expensive (it included enough MS code to run windows apps, and IBM had a steep royalty on that) and had extreme requirements (8M could just barely get the shell going, 16M was needed if you wanted to run TCP/IP as well, but the public had no idea about TCP/IP). There were other competing products as well (SCO Unix hadn't been bought by trolls, Linux was just starting to ship, there was something called HP new wave which I don't think was really the competitor people claimed, GEOS was trying to move up to the big boys). MS managed to stall everybody with long claims of "32bit Windows" vapor. MS shipped NT in 2003 (which had all the cost problems of OS/2, but was likely easier to use as a server for win3.1 clients). The vapor eventually came to life as win95 (when they announce the name plenty of wags familiar with the vapor trail laughed at the idea of it finally shipping that year). As much as win95 gets fitted into the "bad" side of "good/bad/good" MS OS claims, it was more than good enough to finally slam the door on the competition. From that point on, when MS shipped it you were stuck with it.

The rise of windows pretty much cemented Office in place. Word Perfect, Quattro Pro, and Lotus were the big boys of the time, but were slow to switch to windows. Part of this was that users had sunk time into learning the keyboard comands under DOS and weren't about to learn anything else for software with the same name (they would happily use windows commands for Office, go figure). The other side of the equation was that Office used the real winAPI used to make windows and everybody else had to make do with the "official" API that bounced around a few times to get to the right place. Not to say that the "real API" wasn't reverse engineered/leaked/whatever, and you could tell who was using which API by seeing which broke every time a new Windows was introduced (especially NT); pretty much everything from MS wouldn't work and lots from others. I suspect that much of the success of windows was the fact that its file format was completely incompatible with everything. An Office document is essentially a C++ object, and it saved by serializing and storing that object. Don't ask me how OpenOffice manages to be compatible, but nobody (including other editions of Office) ever seem to get it right. Of course, Office had no issues loading (and converting) Word Perfect, Quattro, and Lotus (with some issues in the latter due to macro differnces). Upgrades were forced by backward compatibility (if you boss got a new computer and sent you a Word doc, you had to ask someone with that edition of Word to print it out. Your old Word wouldn't read it.

I'll let someone else describe the rise of the Xbox. I don't do consoles, but I will claim that between the original xbox subsidy and the RRoDeath, I don't think that the entertainment devision will ever make up what was sunk in it. The fact that it at least is putting money back towards those sunk funds is remarkable, making it (along side windows and office, of course) one of the few profitable enterprises in Redmond.

Note that past here you get into stuff MS doesn't have a monopoly on, (Zune, Kin, Bing, WinCE, Winpones, Surface, and other losers). Guess what, it all is $hit and it all loses money like mad. As far as I can tell, it all exists as some sort of PR stunt to make MS look like some sort of technology company instead of a cash cow management company. Since Bill Gates is perfectly willing to let Steve Balmer keep his job, I would assume that both of them get this perfectly and are afraid anyone else would screw it up. Look at the facts: if Microsoft has had to compete with *any* product without a chokehold on the customer's legacy systems, they fail. They fail hard and lose billions. The one exception is Xbox, where MS arrogance and contempt of the customer is exceeded by Sony (who is in tern forcing the xbox180, but who knows what will happen once things ship. I'm guessing both will go back to "only buy through our stores and pay us more royalties".

So yes, I would say that MS happily makes $hit, has only made $hit, and its been 20 years since they had to do anything else. With Sony actually trying to build a machine that gamers will want (first since what, the PS2?), this leaves MS slowly trying to react, bringing us the Xbox180 and jettising executives that merely maintain the standard level of MS arrogance (don't forget the "deal with it" tweeter along with the Xbox boss).

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riopato

Lol that's a long winded opinion based on bias and conjecture. Just because you believe in something doesn't make it fact. Microsoft's quarterly earnings is public record, whatever you think about Microsoft, I still wish I can make the kind of $hit that brings in that kind of revenue! This way I can learn from a billion dollar loss the way Microsoft did from Xbox 360.

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bjoswald

Not surprised. Nobody wants a gimped rip-off of a full-blown product, especially one as lambasted as Windows 8. Every so-called "normal person" has at least 1 geek friend, and word-of-mouth gets around fast. Good riddance, Windows RT. Serves Microsoft right for treating people like idiots and shoving this shit in their face.

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AFDozerman

Jesus christ. A triple post?

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AFDozerman

Triple post.

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AFDozerman

My how the mighty are falling.

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RUSENSITIVESWEETNESS

Anyone tried to interpret Hood's twisted marketing speak? Investors are getting pissed on, and she's trying to convince them it's raining.

Blaming their losses on the market decline they themselves are largely responsible for? That takes balls.

How is it Ballmer still has his job?

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riopato

Quarterly earnings is roughly $20 billion. Less than $1 billion loss so far makes it a good year currently.

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NatashaSpence02

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methuselah

Who wants a freakin' Windows device that you can't install your standard software on?

Surface RT - Junk
Surface Pro - Awesome

Microsoft is completely out of touch (no pun intended).

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Army Of One

I'm not disagreeing with your opinion but it makes me want to ask this question.

I'll admit I don't know much about Apple products but If I were to own a MacBook running their most recent OS (10.6 I think)and purchased software for it, would I be able to install that software on an iPad or would I have the same problem as the RT vs Pro issue that Microsoft has?

I hear constant complaints about RT not being compatible with Win 8 software but doesn't Apple have the same sort of setup?

If that's true It makes me wonder why Microsoft gets constantly blasted for this when Apple continues to sell like crazy.

(I have no intentions of ever buying an Apple product)

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CaptainFabulous

Because Apple calls their desktop operating system MacOS while their mobile operating system is iOS. So there is no confusion that one is not compatible with the other and each have their own completely separate ecosystems.

But that's not the case with Surface. Microsoft's desktop OS is called Windows. Their phone OS is called Windows. Their tablet OS is called Windows. That's a problem. Sticking an RT after it isn't going to clearly and easily delineate that it's not the same as desktop Windows and can't run desktop applications, especially when the interface looks exactly the same (also not the case with Apple products).

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riopato

So you are saying that people are too stupid to know the difference between Windows 8 RT and windows 8? Here I thought most iPad owners don't even know what Mac osx even is or the fact that Apple even makes PCs.

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Renegade Knight

That's a fair assessment on your part. RT is incompatible with 7 and compatible with the Metro part of 8. That's more than you get with Android or iOS.

My own theory is that people who want Windows in a tablet want Windows and not the cripled RT. If they wanted a clean break with their old software, then they can buy anything from RT to Android and iOS and the latter two are far more well known.

RT needs to be a lot cheaper for it to sell well.

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Engelsstaub

It's a goddamned conspiracy, that's why.

Thanks for qualifying this with your cut & paste Geek Cred Mantra stating your intentions to never own Apple. I know I was worried about it ;) People on here say that so much that it should be a sig-line.

...but srs: I think it's because most Windows power users actually want something that distinguishes itself from the limited utility of iOS and Android tablets. There's little purpose in a third-option with shitty app selection. ...same reason why nobody gives a rip about Windows Phone.

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Paper Jam

I think the difference between Apple and Microsoft's strategy here is that Apple created an ecosystem for their mobile devices with the App Store and iPhone first, and then brought the iPad into an already fleshed out environment. MS has tried a more top down approach. They completely revamped Windows and tried to merge it's desktop platform with it's tablet platform, and then have their smartphone OS be the standalone platform. Apple has wisely made their desktop OS separate, being that tablets are considered by most to be a mobile device. MS has tried to recreated how people get their software on the desktop, and tacked on an OS for the tablet that looks the same but is lacking some of the function of the full version. This is my take on it, as these are the reasons I am not interested in Win8, WP8, or RT.

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riopato

How is this any different from the starter editions that was installed in netbooks? Yes you could still install legacy programs in them but you wouldn't want to run them! RT takes away the option to even install programs that can't run on devices like this.
Also let's set the record straight about Apple. When the iphone first came out, they did state that the os was OSX "mini". It was later on that they renamed it iOS in order differentiating itself form mac osx.

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xeones

it's a bloody shame if they give up on surface because of the RT. It's the whole concept of windows RT that is flawed.... It's a useless operating system. You can only run metro apps? Hell, you might as well get an ipad.

The surface pro is awesome however, just a little expensive. A haswell proc (would solve heat and battery life issues)and some more storage at a decent price would make one hell of a surface pro 2 and i would totally buy it.

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riopato

I don't think they will give up on this one until another iteration fails, possibly a tegra 4 version. It's a matter of time really, there are people who still don't really know what Surface is let alone the difference between RT and Pro.
I usually explain it as Rt is a netbook replacement in tablet format and Pro is a tablet pc. If only Microsoft priced RT closer to netbook pricing, this market would possibly be very different.

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Renegade Knight

The RT was late to the market. Android and iOS have been around a few years. That's forever in internet years. The RT is a failure because most of us who wanted a tablet have one and those of us who were wanting a better tablet can get the Surface Pro. The Pro isn't a flop.

I'd love Haswell in a PRo though if they put them on fire sale I'd consider a currnet gen...if I can get over that I can't upgrade it to do the job I want and I'd have to settle.

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someuid

Microsoft, you're not a hardware company. A few keyboards and mice do not make you a hardware player.

Stick to your software. You aren't doing that and it is showing with your ramming of Metro on everything from phones to tablet thingies to laptops, desktops and even servers (WTF?!?!).

Whipping up two borderline useable products just to push your software is a bad idea because it both shows the world you're no good at hardware for hardware's sake and it shows you let it affect rational decision making on your software, which is your primary source of income.

Dump Surface. Make Modern optional. Your problems are solved.

One last thing - get that XBox to be PC compatible. Your console games should be playable on either the XBox or the PC. Tell the yokels running the XBox division to get in line or get out. You're passing up a mountain of opportunity. You would flatten iOS and Android if people could take their games and their office with them on a single device. With the latest Richland and Haswell chips, this is doable. You just have to stop allowing the in-company castle building that your top level reports are spending all their time on.

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riopato

This brings up the topic of Microsoft's DRM reversal of the Xbox One. Microsoft designed a console that's basically a pc which originally had Steam like capabilities that tied Xbox live accounts as the DRM. A user's account had access to every game activated on it and that user could log on into any Xbox in order to play any game on their account.
Microsoft could then create their Xbox portal for windows and all the user has to do is login. I would like to add a reminder that a Microsoft id can also be tied to an Xbox live account.
Of course this will never happen because Microsoft reversed their original concept of DRM due to pressure from a community that most likely wasn't going to buy an Xbox one in the first place.

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Scatter

I for one do not want the PC to be able to play Xbox games. The amount of DRM that Microsoft would force upon us would be staggering. Everything would be locked down.

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Mikey109105

I'm sorry, but I agree with someuid. I agree DRM sucks, but I also think console games should be playable on PC's without having to create craptastic ports for them. I'd have no problem whatsoever getting a xbox like controller for my PC. Use that and all your incompatibility issues with keyboards a mice are solved (well for the ones who have a PC compatible controller). I've seen plenty of games for xbox, gamecube, ps3 etc that I wish they'd have made for the PC too, though there are a small number of titles that should remain console exclusive (like Mario for example, simply because he started out there).

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riopato

What? You do know they already make a Xbox 360 controller for Windows and they also make a usb receiver for windows also?

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Mikey109105

Yes, but can you stick a xbox disk in a PC's CD/DVD drive and play it? No, you cannot, and THAT was my point.

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riopato

You can't put an Xbox 360 disc in a windows pc since the hardware technology isn't compatible. Xbox One discs could've been a different story though considering that it's basically a pc already. Since Microsoft changed their minds to place the DRM on the discs instead on the user's account, this may not be possible anymore.

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bensen408

Also the lack of backwards compatibility and slow performance is a killer. Why would I buy something I can't install my mountain of software on? Or play games? Or suffer through slowdowns? Or open up and upgrade?

Microsoft really fubared this one.

Forcing Windows8 on us with it's lame Tile interface.... agreed.... blows monkey nuggets.

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PCWolf

What does Windows Phone, Surface RT & Windows 8 all have in common? That TACKY STUPID LOOKING TILE INTERFACE, & that's why they are all Failing. The Message is clear: Most people hate that tile UI, & the biggest mistake Microsoft ever did, was to put it on everything. MS should stop trying to push it's "Tacky Tiles" & start trying to look more like Android & iOS.

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riopato

History repeats itself again. Those tacky tiles in your opinion reminds me of the same type of criticism that windows 95 had when it first came out. Back then Apple was starting to crash and it was no secret that Microsoft stole the gui concept from Apple.

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wumpus

Windows 8 hasn't held up desktop sales even though it is far more of a disaster on the desktop. It is even pushing out vista (go team:)). Surface Pro isn't taking this hit, even though it costs something like 2.5 times an ipad2. The outrageous price hasn't made MS admit to a new billion dollar loss, why would the stupid tiles?

The issue is if you are willing to suffer through windows, you want *real* windows. You want apps. You want every x86 app made since 1981 to run on your machine (backward compatibility not guaranteed for apps from the 20th century or otherwise rely on unspeakable security holes). You don't want to limit yourself to ARM apps you got from the MSstore. If you wanted a walled garden you would have bought an iPad, Apple are simply better gardeners. And no, mobile Office isn't enough to sell the RT, which is becoming painfully obvious.

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Renegade Knight

The Tile interface is actually better than Android Icon/Widgets. It's flaw isn't the tiles. It's flaw is that RT isn't 8.

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riopato

RT's flaw is that no one is writing apps that people want possibly because people don't know what they want. You list all the apps that's needed to make RT worth using and I bet there's someone out there complaining about 1 app that's missing.
Also, I'm still waiting for VLC to come out for RT and I'm a backer in their kick start. They've already stated the issues of writing for RT which is taking them longer than expected. If they are having issues, how many more developers are having the same problem? This is what Microsoft really needs to fix!

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QUINTIX256

>Looking like Andriod & iOS (and by extension dying Blackberry and dead Palm, and other sundry grid-o-icons with widgets maybe)
Not going to happen, not after apple co-founder Steve Wozniak said, well
http://www.maximumpc.com/article/news/apple_co-founder_steve_wozniak_gushes_over_windows_phone_7

The tiles may or may not go, but do not expect the clean monochrome typography/signage inspired layouts ala the late Zune or Media Center to go away.