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A Radical Plan For Saving Microsoft's Surface RT

timothy posted 1 year,8 days | from the we're-just-here-to-destroy-and-save-the-village dept.

Businesses 391

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."

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391 comments

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Dumping? (2, Insightful)

Rob Y. (110975) | 1 year,8 days | (#44362993)

Illegal, no?

Re:Dumping? (0)

Anonymous Coward | 1 year,8 days | (#44363045)

no.

Re:Dumping? (4, Insightful)

Jeremiah Cornelius (137) | 1 year,8 days | (#44363417)

HACK THE LOADER.

Ubuntu tablet for $75 USD.

So?

HACK THE LOADER!

Re:Dumping? (5, Interesting)

gl4ss (559668) | 1 year,8 days | (#44363053)

Illegal, no?

well, dumping what you have is not illegal.

the 900 mil writeoff may well be taking it into account that they would get rid of the stock at price of 150... or whatever.

however here is the point..
"(Despite that sales spike, HP decided to kill the TouchPad; the margins on $99 obviously didn't work out to everyone's satisfaction.)" who the fuck cares if it flies off the shelf for a very limited amount of time? stupid article is stupid and even knows it. make a buttload of loss on every device and make up for it in scale of your inventory..

Re:Dumping? (5, Informative)

TheRaven64 (641858) | 1 year,8 days | (#44363247)

HP's approach was monumentally stupid. WebOS was a really nice system (I still prefer the UI on my TouchPad to my TransformerPad Infinity StupidName), but it lacked developers. They were giving them away to developers at the end (which is how I got mine), but then they killed the platform so there was no incentive to write a single line of code for it. I ported Objective-C to work on it, but then gave up on the platform when it became clear that the TouchPad was the last device ever to use it.

Re:Dumping? (3, Insightful)

Zontar The Mindless (9002) | 1 year,8 days | (#44363297)

Nerval's submissions have really gotten silly lately.

Re:Dumping? (1)

Nemyst (1383049) | 1 year,8 days | (#44363391)

Yeah, it's a bit weird to take HP as an example considering they've been a monumental failure in the mobile space. If anything, it shows that fire sales can recoup some loss on the short term but do not help at all in the long term.

Re:Dumping? (0)

Anonymous Coward | 1 year,8 days | (#44363413)

If any part of that strategy is "... and then raise prices once you break into a more controlling position in the marketplace" it's not legal in the US as an unfair trade practice. To be dumping it needs to be an imported itnernational good.

The concept is the same it's just not covered under the Anti-dumping stattutes. Anti-Dumping is why microsoft has Developing Economies editions of windows. They know there are markets where they can't sell Windows for $200-$400 each but don't want to price it that low in it's domestic market.

Re:Dumping? (4, Insightful)

robthebloke (1308483) | 1 year,8 days | (#44363447)

Agreed, stupid article is extremely stupid. MS can afford to take a writedown on the 360 say, because they know full well they'll make the money back on game sales later on. Selling a tablet at a loss however, doesn't make any sense to anybody. How are they going to make their money back in this scenario? It's not like they can make the OS free-to-play, and then allow 'one run command per 15minutes of grind, or buy this barrel of gems for 20 run commands'.
If you want to make a product that sells in high volume, then you need to make sure that the product is something that the market wants. This is the thing I can't really get my head around with MS at the moment. It's almost like they've replaced market-research with pure-fantasy. Did they not show anyone the metro interface? Didn't anyone mention that it looks like it was designed by a colour blind child with no drawing ability or understanding of aesthetics? Or did they just assume that they could steam roller the world into liking a product that no one wants?

Re:Dumping? (1)

interval1066 (668936) | 1 year,8 days | (#44363063)

Depends, probably, I mean, given enough time and the full warehouses of unsold product they can show the Fed, they can probably sell them for whatever they want, eventually. If I could get an RT for a song I'd certainly grab one. See if I could install Linux on it.

Thats the problem - you can't. (0)

Anonymous Coward | 1 year,8 days | (#44363111)

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....

Re:Thats the problem - you can't. (4, Interesting)

1s44c (552956) | 1 year,8 days | (#44363225)

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.

Re:Thats the problem - you can't. (0)

Anonymous Coward | 1 year,8 days | (#44363517)

Unless you are talking about a "Linux variant" like Android, it is doubtful that a "Linux variant" would be any good on that machine. Most mainstream Linux distros are about as friendly to touch input as Windows 7 is - which is to say they aren't friendly at all.

Re:Thats the problem - you can't. (2)

TheRaven64 (641858) | 1 year,8 days | (#44363263)

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.

Not necessarily (1)

MikeRT (947531) | 1 year,8 days | (#44363067)

Microsoft is a software company targetting hardware here. Android vendors are hardware companies targetting software here. It's bad for the former to bring the cost of software down to $0. Likewise, it's bad for the latter for Microsoft to practically give the hardware away. Since Android's marketshare is now so much higher than that of Windows 8, and iOS would barely even notice the loss, the only companies that might have a real claim of injury would be Blackberry and those behind things like FirefoxOS.

Re:Dumping? (0)

ackthpt (218170) | 1 year,8 days | (#44363117)

Illegal, no?

No. This could be what is called a "Loss Leader" They sell a load of them at or below cost and establish a market presence. Then the RT Pro looks tempting as an upgrade (assuming the price differential isn't too steep). Microsoft's tablets are an unknown in a world dominated by Android and IOS. If they get known then the demand for upgrades and future products will likely increase.

But what do I know, I can't even throw a chair properly.

Re:Dumping? (4, Informative)

ThorGod (456163) | 1 year,8 days | (#44363373)

That's not the definition of a Loss Leader.

Re:Dumping? (0)

Anonymous Coward | 1 year,8 days | (#44363449)

Then the RT Pro looks tempting as an upgrade (assuming the price differential isn't too steep).

What the hell is an RT Pro?

Re:Dumping? (1)

Anonymous Coward | 1 year,8 days | (#44363497)

Then the RT Pro looks tempting as an upgrade

wtf is an "RT Pro"? The RT line and the Pro line are entirely different animals, one is an underpowered, half-breed that looks like Windows but doesn't run shit. The other is a pretty decent laptop/netbook in a tablet formfactor that runs the entire Windows software library. STOP CONFLATING THEM!

-AC

Re:Dumping? (1)

Anonymous Coward | 1 year,8 days | (#44363143)

It's not really dumping in this case. . .

This isn't predatory pricing on a successful product in hopes of knock other competitors out of the market. That's the traditional definition of dumping.

Instead you're simply trying to get rid of inventory that won't, even at cost. There's nothing that says you can't recoup some of your expenses if you reduce the price below what it cost to manufacture for a product that either failed or is failing.

Re:Dumping? (5, Informative)

spire3661 (1038968) | 1 year,8 days | (#44363167)

Dumping generally refers to a foreign company

'In economics, "dumping" is a kind of predatory pricing, especially in the context of international trade.'

http://en.wikipedia.org/wiki/Dumping_(pricing_policy) [wikipedia.org]

Re:Dumping? (4, Informative)

ZombieBraintrust (1685608) | 1 year,8 days | (#44363169)

No, it is not illegal to give stuff away. It is only illegal when paired with a monopolist strategy. Example dump cheap tablets until Apple goes out of business. Then raise prices. It is a strategy that only works with competitors with cashflow problems.

Re:Dumping? (1)

noh8rz10 (2716597) | 1 year,8 days | (#44363351)

like the way amazon underpriced ebooks, then when apple lost the case and all the publishers settled, started raising the prices? qed.

Re:Dumping? (0)

Anonymous Coward | 1 year,8 days | (#44363279)

No.

If people are stupid enough to buy the things it's their own fault. It would be like someone having read the reviews for Gigli and then buying a ticket to see it before it's out of theatres, you'd have no one to blame but yourself.

Re:Dumping? (1)

MightyYar (622222) | 1 year,8 days | (#44363347)

I'd buy a few for under $100. At the worst, they'd make nice video players for long car/plane rides with the kids. I'm sure they are adequate for couch internet surfing. If they can do anything else at all, that's pure gravy. Hardware-wise, these aren't crap tablets - they are reasonably nice machines (spec-wise... never seen one myself).

Re:Dumping? (1)

bmo (77928) | 1 year,8 days | (#44363345)

Illegal, no?

Not if it's in a proper landfill capped with concrete.

Surface RT: Apple /// Electric Boogaloo.

--
BMO

Re:Dumping? NO! (2)

Jeremiah Cornelius (137) | 1 year,8 days | (#44363495)

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!

Not so radical. (1)

Anonymous Coward | 1 year,8 days | (#44363015)

Port the full Win8 OS to ARM.
Include the ability to bind to AD and be managed by group policy.
Stop trying to be like Apple and do what they've already done successfully on two previous occasions: software emulation of the "legacy" chip architecture so that Windows RT can actually run x86 applications, just like Apple did with 68k to PPC and PPC to x86 transitions.

Re:Not so radical. (4, Informative)

cbhacking (979169) | 1 year,8 days | (#44363383)

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.

Re:Not so radical. (3, Interesting)

cbhacking (979169) | 1 year,8 days | (#44363479)

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.

Can we get off the dead horse already? (1)

Opportunist (166417) | 1 year,8 days | (#44363025)

Seriously, no matter how you beat it, it won't gallop anymore.

A Better Option (5, Funny)

Antipater (2053064) | 1 year,8 days | (#44363029)

I believe E.T.: The Video Game provides a better example for what Microsoft should do with its surplus Surfaces.

Re:A Better Option (4, Informative)

Bill, Shooter of Bul (629286) | 1 year,8 days | (#44363105)

You mean reprogram them with something better and slap a different label on them? Cause thats what actually happened with ET according to people who worked at atari.

Re:A Better Option (3, Interesting)

gstoddart (321705) | 1 year,8 days | (#44363293)

You mean reprogram them with something better and slap a different label on them? Cause thats what actually happened with ET according to people who worked at atari.

I'm pretty sure he means dump into landfil [wikipedia.org] and walk away.

Now, as to if that ever actually happened, I couldn't say.

Re:A Better Option (2)

0123456 (636235) | 1 year,8 days | (#44363295)

You mean reprogram them with something better and slap a different label on them? Cause thats what actually happened with ET according to people who worked at atari.

Surely they wouldn't have used EPROMs for games that were expected to sell millions of copies? The cost difference between those and mass-produced PROMs would presumably have been millions of dollars.

Re:A Better Option (2)

Bill, Shooter of Bul (629286) | 1 year,8 days | (#44363461)

I don't know the specifics, but in an interview on NPR, the programmer Howard Scott Warshaw said that he thought that's what they did "reprogram" them. I'm not sure exactly what he meant by that, if they just replaced prom on them or reprogramed an eprom that was there. Can't find a link to the interview ...

Re:A Better Option (-1)

Anonymous Coward | 1 year,8 days | (#44363465)

You mean reprogram them with something better and slap a different label on them? Cause thats what actually happened with ET according to people who worked at atari.

Surely they wouldn't have used EPROMs for games that were expected to sell millions of copies? The cost difference between those and mass-produced PROMs would presumably have been millions of dollars.

They might have, depending on just how much up their own asses management had gone by that point. And stop calling me Shirley.

Re:A Better Option (0)

MightyYar (622222) | 1 year,8 days | (#44363485)

I know for sure (having seen the inside of an ET cartridge) that the ROM was a chip that was epoxied directly to the cartridge circuit board, wirebonded, and then glop-topped - all in Thailand. I don't know if other ET carts were made in other locations or with different methods, but the only thing they could have reused is the plastic cartridge housing IMHO.

Re:A Better Option (1, Troll)

mrspoonsi (2955715) | 1 year,8 days | (#44363481)

How about, collect all the Surfaces in a giant warehouse and arrange so fashion into the shape of a huge chair (see where I am going with this), then invite the CEO to an inspection of the stock, a short time later...surplus Surfaces are no longer a problem, not to mention any pent-up anger about a $900M write off will be gone, 2 birds one stone.

I heard it through the grapevine (2)

rwa2 (4391) | 1 year,8 days | (#44363035)

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!

Re:I heard it through the grapevine (0)

Anonymous Coward | 1 year,8 days | (#44363337)

dumping them on the educational market. Someone in this country still believes the children are our (/their) future, I suppose.

You assume it will be the educational market in this country. They'll give them to Indian schools to grow more H1-Bs. Maybe they can hire one to replace Ballmer, so it wouldn't be all bad, I guess.

$100 for useless is still useless (3, Insightful)

MachineShedFred (621896) | 1 year,8 days | (#44363037)

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.

Re:$100 for useless is still useless (0)

interval1066 (668936) | 1 year,8 days | (#44363163)

SecureBoot is no big deal, at least I haven't had too many problems with it. I'm running Linux right now on a 13" Pro Retina, and UEFI wasn't too much of an issue.

Re:$100 for useless is still useless (5, Informative)

Anonymous Coward | 1 year,8 days | (#44363269)

Excuse me... pay attention.

Windows RT. No UEFI key available to the user. No alternative boot. No way to even develop your own non-Metro application.

It renders the Surface RT table a glorified rock... unless you happen to want to run software from Microsof't's app store. Even then... $100 may be overpriced.

Re:$100 for useless is still useless (2, Insightful)

Anonymous Coward | 1 year,8 days | (#44363375)

MS requires on x86 that you can disable secureboot. But, they also require that on ARM that it CANNOT be disabled. Your ability to install OS other than windows on an x86 UEFI machine is both as designed, and also irrelevant when talking about these ARM based tablets.

Re:$100 for useless is still useless (5, Informative)

maccodemonkey (1438585) | 1 year,8 days | (#44363453)

SecureBoot is no big deal, at least I haven't had too many problems with it. I'm running Linux right now on a 13" Pro Retina, and UEFI wasn't too much of an issue.

Apple laptops don't use secure boot. EFI does not imply secure boot.

Re:$100 for useless is still useless (2)

MachineShedFred (621896) | 1 year,8 days | (#44363503)

Apple isn't implementing SecureBoot. I run Windows 8 (hacked with a real Start menu) on a MacPro4,1 because Win8 actually does a real EFI boot, unlike the complete hash of it they made with Windows 7.

That 5 year old Mac Pro boots Win8 in under 12 seconds.

Re:$100 for useless is still useless (0)

Anonymous Coward | 1 year,8 days | (#44363191)

Exactly!

Re:$100 for useless is still useless (1)

chuckinator (2409512) | 1 year,8 days | (#44363209)

Fred mirrors my opinion. I have zero interest in anything related to win8, so this caught my interest as a cheap tinker toy to throw ubuntu or fedora on. Guess what? The locked bootloader prevents you from installing anything on it that's not win8. $100 is still too much for a paperweight.

Re:$100 for useless is still useless (1)

Anonymous Coward | 1 year,8 days | (#44363363)

Because the largest market for tablets is, by far, people who demand the ability to boot other operating systems.

Yeah give them away! (2)

binarylarry (1338699) | 1 year,8 days | (#44363039)

Because fuck the shareholders, that's why!

Chairs to their faces all of em!

Re:Yeah give them away! (2)

SteveFoerster (136027) | 1 year,8 days | (#44363325)

And keeping them in a warehouse does what good for shareholders, exactly?

Re:Yeah give them away! (2)

gnasher719 (869701) | 1 year,8 days | (#44363407)

And keeping them in a warehouse does what good for shareholders, exactly?

It gives Microsoft a chance to come back with a better product and crack a market where they could make billions over billions if successful. A firesale destroys that chance forever.

Put Android on It. (0)

RichMan (8097) | 1 year,8 days | (#44363041)

Put android on it.
It will become more functional, have better battery life and a bigger application library.

Re:Put Android on It. (1)

KreAture (105311) | 1 year,8 days | (#44363129)

Can I has Android?

Re:Put Android on It. (2)

NixieBunny (859050) | 1 year,8 days | (#44363161)

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.

Re:Put Android on It. (1)

VortexCortex (1117377) | 1 year,8 days | (#44363175)

Failing beating them, joining them is on the table? Ah, It's time for another round of the three E's: Embrace, Extend, Extinguish.

Re:Put Android on It. (2)

chuckinator (2409512) | 1 year,8 days | (#44363223)

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.

Price (2)

SecretSquirrel33 (1857738) | 1 year,8 days | (#44363059)

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.

Re:Price (2)

Bill, Shooter of Bul (629286) | 1 year,8 days | (#44363135)

Yeah, they wanted it to sell so they kept the price low, but they didn't want to tick off their OEM's anymore than they already did so they didn't want to sell it any cheaper. In the end, they just screwed themselves.

It only works if there is a back end (2)

TWiTfan (2887093) | 1 year,8 days | (#44363075)

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.

Lemons into Kool aid? (1)

BoRegardless (721219) | 1 year,8 days | (#44363081)

Can you stomach it?

Lawyers sharpen your pencils (0)

Anonymous Coward | 1 year,8 days | (#44363085)

There must be hordes of lawyers all over the world just itching for MS do something as silly as this.
THey will be made to pay dearly if they ever try to dump all this kit at well less than cost price.

Re:Lawyers sharpen your pencils (0)

Anonymous Coward | 1 year,8 days | (#44363273)

Please don't use words you don't really know the meaning of--in this case, that'd be "dumping".

Re:Lawyers sharpen your pencils (2, Informative)

Anonymous Coward | 1 year,8 days | (#44363397)

It's not called "Dumping" it is called "Liquidating" - There is a difference..
.

Change the OS (0)

Anonymous Coward | 1 year,8 days | (#44363103)

Install Android or FirefoxOS and _then_ sell them.

dump them at $79 so they end up (5, Interesting)

microcars (708223) | 1 year,8 days | (#44363107)

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?

Re:dump them at $79 so they end up (2)

bored (40072) | 1 year,8 days | (#44363423)

Which is why you don't do what HP did (just more incompetence, what did you expect?).

Instead lowering the price gradually until the devices start to move at a target pace. That way MS both makes the maximum from each one as well as moves them at the rate they wish. This isn't even that hard when compared with something like concert/airline tickets because the people coming into the pool late aren't the ones willing to pay more than the average.

But, it seems some manager somewhere got a bonus by claiming they would make $X on $Y units, and fixed the price at that level.

Re:dump them at $79 so they end up (1)

ThorGod (456163) | 1 year,8 days | (#44363429)

yes although I don't think they sold so easily for that price

Still a lot (4, Interesting)

HoldmyCauls (239328) | 1 year,8 days | (#44363127)

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.

Can't load other software on it (1)

Anonymous Coward | 1 year,8 days | (#44363133)

You cannot load a diff OS on it, so it is worthless at nearly any price. I guess if a few dollars, you could tear it apart and salvage the LCD panel and such, but with ipad retina displays available on ebay for well under $50 it would need to be dirt cheap to make that pay.

The Surface RT is as fucked as the normal Surface (1)

RocketRabbit (830691) | 1 year,8 days | (#44363139)

A radical plan indeed. All I have to say to the genius who came up with this plan is "nigga, you dumb."

The best thing they can do is throw the hardware down a hole and write it off, then forget their Surface RT ever happened.

Seriously, a Windows tablet that won't run Windows software, that is named and promoted so confusingly that you have had MS execs fuck up and forget which is which.

Nigga, you dumb.

Yeah, and they'd go broke (2, Insightful)

maccodemonkey (1438585) | 1 year,8 days | (#44363147)

"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?

Re:Yeah, and they'd go broke (0)

Anonymous Coward | 1 year,8 days | (#44363311)

He's talking about selling the ones they have already built and are now sitting in storage. Microsoft has already paid for their production.

Re:Yeah, and they'd go broke (1)

Anonymous Coward | 1 year,8 days | (#44363425)

I don't think you get it. If they have the stock on hand and write it off, that means they're earning $ 0 on each unit. If they sell one for $75, they're making $ 75 on it.

Right now they don't have the option of selling them for $ 499, so they have a warehouse full of objects that cost them money. They need to figure out what price point will sell, and what kind of strategy is best for future growth of Windows RT.

Re:Yeah, and they'd go broke (2)

maccodemonkey (1438585) | 1 year,8 days | (#44363475)

I don't think you get it. If they have the stock on hand and write it off, that means they're earning $ 0 on each unit. If they sell one for $75, they're making $ 75 on it.

Right now they don't have the option of selling them for $ 499, so they have a warehouse full of objects that cost them money. They need to figure out what price point will sell, and what kind of strategy is best for future growth of Windows RT.

Sure, but that doesn't make it a viable long term strategy. Even if they sold every one they already have in stock (estimated at 4 million units), it wouldn't make a dent in the tablet market.

I know what a fire sale is, but a fire sale isn't going to capture the market like OP is suggesting.

Re:Yeah, and they'd go broke (1)

Anonymous Coward | 1 year,8 days | (#44363459)

I believe the author's thought is that it would deplete their backlog that, at this point, looks like it will just end up in a land fill. This would prime the pump with consumers and give developers a reason to write software for the masses that now own a cheap Surface RT tablet. The problems with this plan are pretty big:

1. The consumers who see their friends pick up a $75 MS Surface will expect the price to stay cheap. At some point MS needs to make money, but all new consumers will be pissed about paying too much.
2. There are likely anti-dumping laws that would be problematic.
3. There are likely license fees based on units sold. This might make burying the tablets cheaper than selling them at a deep discount.

At this point I think MS should just write off Surface RT, end the line, and go to Intel only tablets. They would be able to sell all of their PC software on the device and point out to consumers that for $600 (or whatever they can whittle it down to) they can get a laptop/tablet convertible so there is no need to own both. Most people I know with a tablet have a laptop for doing real work - word documents, excel, editing photos, etc. They use the tablet to surf/play games in the john or while watching TV. The flaw in this plan is battery life. Intel/MS needs to solve power consumption issues.

Re:Yeah, and they'd go broke (3, Interesting)

sideslash (1865434) | 1 year,8 days | (#44363469)

The more they sell, the more money they lose.

When you (i.e. Microsoft) have already bought large quantities of a product that are sitting in your warehouse, that's called a "sunk cost". There is no way to "save" that money you've already spent; the only question is how best to use the warehoused inventory to make new income. In terms of business strategy, you actually pretty much ignore sunk costs when deciding what to do next.

Re:Yeah, and they'd go broke (0)

Anonymous Coward | 1 year,8 days | (#44363507)

The idea is 'Take what they have, and sell it at a low price' Not 'Continue producing more, and continue selling at a low price.'

I know the 6 million units is just a guess, but assume they have 6 million units.

As is, those 6 million units are causing them to lose $900 million.

If they sell each one for $50, they get $300 million. Which means they're still losing $600 million. Mind you, $600 million is still a whopping $300 million less than $900 million. At the same time, Microsoft is getting a little bit of market penetration. That's no where near as bad as losing $900 million and calling it quits.

Once all the units are sold, the Surface RT can be said to be discontinued/retired and never produced again. The point is not to sell tablets at 1/3 cost and hope the world will come to love Microsoft. The point is to mitigate the damage from a flopped product.

A better way: (2, Insightful)

Anonymous Coward | 1 year,8 days | (#44363179)

Why not just unlock (via patch or something) the boot loader, so that you can load Android/Linux or GNU/Linux?

Re:A better way: (0)

Anonymous Coward | 1 year,8 days | (#44363343)

Until you provide details for the "or something" step, all I hear is my ex offering me more abuse.

Re:A better way: (1)

lxs (131946) | 1 year,8 days | (#44363467)

That would be the worst outcome from Microsoft's perspective.

A couple of hundred?! (0)

Anonymous Coward | 1 year,8 days | (#44363181)

The bar was set by Nexus 10: $409, and this is for an excellent tablet running an OS that is solid proved and has tons of popular apps already available for it. So the price for a Surface Pro tablet should be more like $309 or so.

Microsoft forgets its own history (4, Interesting)

gestalt_n_pepper (991155) | 1 year,8 days | (#44363185)

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.

Perhaps a mobile-friendly OS would work (0)

Anonymous Coward | 1 year,8 days | (#44363203)

What they really need is a mobile-friendly ARM OS to run on them. Something like Android, if they want them to sell.

Support costs (4, Interesting)

hawguy (1600213) | 1 year,8 days | (#44363211)

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.

Locked Bootloader (5, Insightful)

TheNinjaroach (878876) | 1 year,8 days | (#44363231)

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.

Did not work for HP or BlackBerry.. (1)

Anonymous Coward | 1 year,8 days | (#44363285)

Both the touchpad and the Playbook went on firesale and currently both are fighting for a fraction of a percent of the market.

The problems with winRT have been talk about a lot lately but my main disappointment was the software lock-in. Only "Metro" apps and only those available via the store? Sure, let's take all the best things about windows and throw them out. Great idea!

As if to jab the knife in further, the offer office as a non-metro app. The only non metro app. Why? Because the office codebase is so old convoluted that they can't port it to Metro. (Gee, I wonder if any other developers would like to go down this path)

That's what pisses me off about RT. You could port your existing apps with a tweak and a re-compile (And probably some quick hacking to make the UI more touch friendly). Anyone could make really great software for the thing. There is even proof shipping right on the thing, the entire Microsoft fucking office suite! And you can't touch it. Everything you and your end users want, and it's locked up so MS can be like Apple. (FYI you can port your own 'desktop' apps with a re-compile.. But you have to jailbreak your RT device to run them)

And yes, of course Apple does it the same way. Of course they have a locked down app store. (Really, why do I have to point this out? No fucking shit Sherlock) - But Microsoft is no Apple. It doesn't matter if RT is as good as Apple's offerings. It has to be BETTER or there is no incentive to switch. There is zero reason to pick up the RT because the existing Apple and Android ecosystems are so rich and well supported.

RIM did this with Playbook (1)

grub (11606) | 1 year,8 days | (#44363289)

RIM made the Playbook dirt cheap. How'd that work out?

who wants connected insecure platform? (1)

kawabago (551139) | 1 year,8 days | (#44363301)

The product will not receive security updates so all it's flaws will quickly have it compromised and render it unusable on the internet.

Radical plan to destroy Microsoft tablets forever (3, Insightful)

gnasher719 (869701) | 1 year,8 days | (#44363353)

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.

zune (1)

Aaron H (2820425) | 1 year,8 days | (#44363359)

It won't make the iPad look like the Zune. The iPod didn't beat the Zune because it was cheaper, it beat it because it was a superior product. (I'm no apple fanboy, though I did briefly own an ipod before I got my smartphone). Dropping the price really low will make it look like a knock-off product, like "COBY" headphones or a fake Louis Vitton bag. Everyone will have one, but everyone will know that you paid a pittance for it.

How about allowing ARM desktop apps beyond Office? (2)

sideslash (1865434) | 1 year,8 days | (#44363395)

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.

Snoypsis of Radical Plan (0)

Anonymous Coward | 1 year,8 days | (#44363405)

1) Make device for $499.
2) Sell device for $50-$75.
3)????
4)Profit!!

Remember the "macintosh XL"? (0)

Anonymous Coward | 1 year,8 days | (#44363411)

Back when Lisas were not selling, Steve Jobs had the semi-brilliant idea of re-launching them as the "Macintosh XL", at only $3,995.

They sold like hotcakes. In fact, they sold out completely and they couldn't fill the demand as the whole Lisa production line had been dismantled.

So retarded, where to begin? (5, Insightful)

sootman (158191) | 1 year,8 days | (#44363421)

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.

surface RT (3, Insightful)

beefoot (2250164) | 1 year,8 days | (#44363437)

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.

And save it...why even? (2)

Pope Raymond Lama (57277) | 1 year,8 days | (#44363473)

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.

Here's a plan: (1)

BLToday (1777712) | 1 year,8 days | (#44363501)

For $399, Surface RT + keyboard cover. That's all it takes for me to get a Surface RT. The keyboard is shown in the ads but not included in the package. I think iSuppli estimate the keyboard cover cost $20 to produce. I don't need a million apps, but I do need a keyboard a lot of the times.

I got the Surface RT for $99 at Teched (0)

Anonymous Coward | 1 year,8 days | (#44363511)

MS offered it for this special price to Teched attendees. It is true that the $99 price made it an impulse buy, but after using it for three days, I quit.

There's just no good apps. And the killer feature of watching whatever video format I had available (eg ISO) was not available.
Have to use IE after using Firefox for years (no other browsers are allowed by MS).

Having to recompile everything to ARM seems to have killed this platform. After being spoiled by android by being able to get any app in any flavor I want and have complete control over my experience seems to have ruined me for the RT.

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