Microsoft lost $900 million on the Surface RT last quarter.

Discussion in 'Windows 8 Forum' started by mitchellvii, Jul 18, 2013.

  1. mitchellvii

    mitchellvii Well-Known Member

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  2. ArnoldC

    ArnoldC New Member

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    Again, I don't know why the press singles out the RT. The explanation was $900M loss is the result of the discount Microsoft now has for the RT.

    So if the Pro was discounted too, they will call it $900M loss on the Surface...
     
  3. jnjroach

    jnjroach Administrator Staff Member

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    It isn't just the price drop that hit on Sunday. Remember that around 80-100,000 units were sold at Microsoft's big 3 conferences in the past 60 days, these were sold at a huge loss, $99 for the RT and $399 for the Pro. Also the are offering the RT to schools at $199.
     
  4. ArnoldC

    ArnoldC New Member

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    I still see that as a strategic move. I really think Microsoft will kill Windows Phone RT, and will be replaced by Windows RT eventually. I don't want to associate this wish with how slow the Windows Phone RT updates are being released. When Windows RT 8.1 gets released with support for LTE and other mobile functionality, Microsoft can now kill off Windows Phone RT.
     
  5. pallentx

    pallentx New Member

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    I think they just made too many. They should have known that without a robust app store, the Surface would be a hard sell to the masses. I firmly believe that will change with time, but that's the reality at launch and possibly for the first few years. A fire sale will be great to a lot of tablets in users' hands. That's the best marketing they could do - get real people actually using them. I'm confident that its a good enough product that the rest will take care of itself.
     
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  6. kristalsoldier

    kristalsoldier Well-Known Member

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    Alternatively, they could have launched the RT at a lower price point - though that too comes with its own share of potential problems!
     
  7. mitchellvii

    mitchellvii Well-Known Member

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    Their biggest mistake was calling it the "Surface RT" instead of just the "Surface". They broke pretty much every product naming rule in the book when they did that. First of all, what the hell is an "RT"? Do you know? Does anyone know? And by adding the "RT" instead of just calling it the "Surface" left the feeling it was something "less". It accentuated that it isn't the "Pro". Think about it. Isn't it weird that there is no model just called the "Surface"? That my friends is TERRIBLE branding.

    And oh yeah, WAY too expensive. The Surface Pro was reasonably priced. The RT? Crazy wrong. And charging $120 for a keyboard it cost them $16 to make? Again, so so wrong.

    Then of course we have their silly commercials with all the clickety-clack snippety-snap dancers that gave no one ANY idea on how a person could actually USE the device. Instead their commercials should have gone like this: "The Surface is better than Android and Apple tablets because..." Or how about a series of commercials just explaining how to use Windows 8?

    Anyway, MS has always been infamous for horrible marketing. This rollout was no different.
     
    Last edited: Jul 19, 2013
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  8. kristalsoldier

    kristalsoldier Well-Known Member

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    As I mentioned in an earlier post, the RT should have been named Surface Essentials, while the Pro could have remained as is. That would have clearly demarcated the product lines and they could have spun the names profitably in their commercials.

    And, yes, MS marketing and pricing were insane. You know what happens when one tries to be too cool - one ends up looking like an idiot. MS's earlier ads were simply idiotic. The later ones, however, were much better.
     
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  9. mitchellvii

    mitchellvii Well-Known Member

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    MS has been obsessed with "outcooling" Apple for years. You can't "outcool" Apple but you can outperform them. THAT should be MS's focus.
     
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  10. drewfromsd

    drewfromsd New Member

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    I agree.
     
  11. pallentx

    pallentx New Member

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    Yeah, RT was a weird name, but I don't think that was the problem. The problem with RT was that it only runs apps from the store and the store didn't have much at launch. That was ok for a lot of people like me, but not going to make a huge sales hit out of the gate.

    As much as I would have liked to have paid less, I think they are better off pricing it high and discounting later. Pricing it on par with the iPad says "We have an equivalent device". Going cheap says you're admitting its not as good as the competition and price is all you have going for you. Of course, the market refused it at that price because there's no apps, but once you start pricing at bargain prices, it would be very difficult to raise the price once the apps were there. MS has to think long term goals here of the entire Windows 8 platform and not worry about version 1 profitability after 6 months. Just like Windows Phone, this is going to be a slow build. When you create an entirely new market like Apple did with the iPad, you can have a runaway success. You you're trying to break into an already mature and crowded market, its going to take some time.
     
  12. tonyz3

    tonyz3 New Member

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    They should have gotten rid of the desk top completely and called it surface metro , than the pro with desk top could be metro pro. Either way still confusing..:big smile:
     

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