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Microsoft just cut in half its orders to suppliers for the Surface RT tablet

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Re: Microsoft just cut in half its orders to suppliers for the Surface RT tablet

#21

Post by rwmj »

Cookingboy wrote: post #14
Sumaso wrote: post #10

"As a result, pundits are already declaring this the beginning of (or an important milestone in) Microsoft’s death spiral." Really? So much of their business is relying on the Surface RT that it will spell doom for the entire company? Highly unlikely.

It's not that their other businesses are failing, but pundits are calling this the nail in the coffin in Microsoft's effort of breaking into the mobile market, and in a bigger picture, transitioning some of their aging business/product line to cope with the new consumer market. If you put it that way, then it does seem like a slow and long decline is what awaits Microsoft in the future.

A good thing for shareholders if they stop wasting money failing in the mobile market.

Re: Microsoft just cut in half its orders to suppliers for the Surface RT tablet

#22

Post by mtgx »

shin_lao wrote: post #4
wildranter wrote: post #3

Earlier quoted context omitted.

Coincidentally both strategies were implemented by Apple, or sort of. Anyway, seems like Redmond's photocopiers have been running like crazy lately.

It's a bit unfair to say that given that both the Surface and the Lumia are quite original.

He was saying they photocopied Apple's distribution strategy not their devices.

It's amazing to me how many companies fall for a strategy that works for Apple, and think that it could easily work for them, too. Apple has so many advantages that makes stuff like this work, that it would be almost impossible for anyone else to get it working without those advantages.

"If only we would get carrier exclusivity, too"

"If only we had our own custom proprietary OS, too"

"If only we created our own proprietary docks and connectors"

"If only we had our own specialized stores"

And many other such things. They copy all these things, thinking that it will work for them just like it did for Apple, without realizing that those work only for Apple, because they are Apple.

Re: Microsoft just cut in half its orders to suppliers for the Surface RT tablet

#23

Post by roc »

brudgers wrote: post #11

If Microsoft is netting $200 per unit, this represents only $400,000,000 of some net revenue projection (assuming the report is correct). Yes, it's more than a rounding error. But it's not going to have much impact on the bottom line. Deathspiral? Microsoft isn't betting the farm on becoming a hardware company.

When they piss off their OEMs with a little surprise, like the Surface was, there's more at stake than just whether that particular hardware succeeds.

Re: Microsoft just cut in half its orders to suppliers for the Surface RT tablet

#24

Post by mgkimsal »

macca321 wrote: post #16

Perhaps they should cut the price in half. And double the screen resolution.

at least cut the price.

I don't get why companies are keen to dump hundreds of millions in development, but don't want to cut price on something because they'll "lose money" on the product.

There's probably more accounting issues and 'predatory pricing' arguments and such that could be made, but at the end of the day, they've already spent the money on all the development of the mobile/surface/phone stuff. If more people aren't using it enough to be a serious long-term player, they've "lost" the money already. "Losing" a bit more by selling the hardware at cost or below cost to establish an installed base doesn't seem wrong. Don't console manufacturers do that, and it's accepted in that market?

Re: Microsoft just cut in half its orders to suppliers for the Surface RT tablet

#25

Post by tallanvor »

UnoriginalGuy wrote: post #9
RawData wrote: post #6

Everyone is waiting for the pro version to come out...why buy this one?

I was going to buy the Pro one until they announced the price. Now I'd just a Macbook Air or an Ultrabook instead.

Well, there are rumors about the price, but nothing has been announced yet.

Re: Microsoft just cut in half its orders to suppliers for the Surface RT tablet

#26

Post by potatolicious »

freehunter wrote: post #13
colkassad wrote: post #2

So I was in Best Buy the other day and asked a Microsoft rep who was there touting Windows 8 where the Surface tablets were. He said they only sell them online and through their store. Why is that? Perhaps they would sell more Surface tablets if they had them visible in a Best Buy where a good portion of middle America demos new electronics? On another note, why is the Nokia Lumia 920 an AT&T exclusive? If they want…

Perhaps they're trying not to compete with their OEM partners, but rather trying to set a benchmark to help their OEM partners compete with Apple.

Except, having used a bunch of Win8 touchscreen machines (desktops, laptops, and convertible/tablet formats) at local tech shops, the Surface RT still blows all of them out of the water in terms of "usual tasks" (emailing, surfing, facebooking, tweeting, etc).

If I were MS, I wouldn't be relying on OEMs to do anything except continue to suck.

Re: Microsoft just cut in half its orders to suppliers for the Surface RT tablet

#27

Post by randomfool »

brudgers wrote: post #11

If Microsoft is netting $200 per unit, this represents only $400,000,000 of some net revenue projection (assuming the report is correct). Yes, it's more than a rounding error. But it's not going to have much impact on the bottom line. Deathspiral? Microsoft isn't betting the farm on becoming a hardware company.

Microsoft made a very large bet on Windows 8 for tablets, making trade-offs against traditional desktop users. You need to also take into account how Windows 8 impacts Microsoft's $20,000,000,000 in Windows revenue.

I wouldn't call this a death spiral either, but what you're seeing is a large bet not paying out as expected.

Re: Microsoft just cut in half its orders to suppliers for the Surface RT tablet

#28

Post by mgkimsal »

mtgx wrote: post #22
shin_lao wrote: post #4

Earlier quoted context omitted.

It's a bit unfair to say that given that both the Surface and the Lumia are quite original.

He was saying they photocopied Apple's distribution strategy not their devices. It's amazing to me how many companies fall for a strategy that works for Apple, and think that it could easily work for them, too. Apple has so many advantages that makes stuff like this work, that it would be almost impossible for anyone else to get it working without those advantages. "If only we would get carrier exclusivity, too" "If…

With a long term and rather singular/focused goal measured in years, not quarters, these probably would work for some other company. But, these elements are really the byproduct of the long-term goals, vs the goals themselves.

I don't see many companies willing to invest in a long-term and multi-pronged strategy. With most companies, one down quarter or bad gartner report and they'll revise next year's activities and products.

Re: Microsoft just cut in half its orders to suppliers for the Surface RT tablet

#29

Post by thematt »

colkassad wrote: post #2

So I was in Best Buy the other day and asked a Microsoft rep who was there touting Windows 8 where the Surface tablets were. He said they only sell them online and through their store. Why is that? Perhaps they would sell more Surface tablets if they had them visible in a Best Buy where a good portion of middle America demos new electronics? On another note, why is the Nokia Lumia 920 an AT&T exclusive? If they want…

I don't blame them. The presentation of hardware at Best Buy is absolutely horrible lately. It's all cabled down, price tags are often tattered or missing and most of the devices can't even be turned on to try them.

I'm sure they could stipulate presentation requirements to some degree, but the current state of affairs is not exactly how I'd want my hardware presented to customers.

Re: Microsoft just cut in half its orders to suppliers for the Surface RT tablet

#30

Post by mynameisvlad »

potatolicious wrote: post #26
freehunter wrote: post #13

Earlier quoted context omitted.

Perhaps they're trying not to compete with their OEM partners, but rather trying to set a benchmark to help their OEM partners compete with Apple.

Except, having used a bunch of Win8 touchscreen machines (desktops, laptops, and convertible/tablet formats) at local tech shops, the Surface RT still blows all of them out of the water in terms of "usual tasks" (emailing, surfing, facebooking, tweeting, etc). If I were MS, I wouldn't be relying on OEMs to do anything except continue to suck.

Except Microsoft, at this point, has to rely on OEMs. They don't have a big enough foothold to get components as cheap as some of their OEM partners, which means their devices, on the whole, will be more expensive.

Plus, a major source of their revenue is OEM licensing, so like it or not, they still have to deal with them.

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