Microsoft forced to take $900 Million Write Off after Surface RT Disaster

By: Talha Bhatti  |   July 28th, 2013   |   Business, News, Tablets

Consumers certainly did want to give Microsoft’s Surface tablet a chance to prove them wrong about Apple being the dominant force in the market, but the device a sheer disappointment for many. Microsoft was forced to take a $900 million write off because of its Surface RT tablet disaster that had it looking like Blackberry when the Canadian smartphone company faced a similar catastrophe with their Playbook.

 

From reports that have been emerging as to why the Surface RT failed, the biggest reason was sluggish performance and crippled features due to the lack of attraction that Microsoft could garner from developers and businesses. Hardware requirements were another major issue faced by Microsoft and its partners, while consumers were turned off by the huge price tag. Microsoft attempted at making a drastic comeback by slashing prices around the globe for its product, but failed to muster up more appeal for the device.

 

Windows 8 is also not seen to be in demand as much after the disappointment consumers received through Windows Vista and 7 not being up to par as well. Revenue has been dropping monumentally for Microsoft as the OS giant continuously fails to get a grip on a product that shakes the market like they did in the past. Steve Ballmer has always wanted to see Microsoft becoming a device based company and not only have to focus on the software aspect, but has been unable to charm the market as of yet.

 

Announcing their 2013 Q4 earnings of $19.9 billion, investors were not worrisome about that, but it was the $900 million write down that shocked many.

 

A press release from Microsoft read as follows:

“These financial results include a $900 million charge, or a $0.07 per share impact, related to Surface RT inventory adjustments.”

 

It was also learned that Microsoft does not plan on shutting down the surface business anytime soon and it was IR head, Chris Suh, who termed them as being “100% committed” in that regard. For now, experts are assuming that there are 6 million, unsold units of the Surface RT still lying around due to the amount of the write off. No official figure has been released in this regard, but looking at how prices were dramatically cut from the promotional stages, it is easy to say that Microsoft wants them out of their possession.

Source: iPhone In Canada, BGR