Microsoft’s first Surface tablet was an absolute disaster. The company managed to pull in $853 million in revenue during the last fiscal year from combined Surface RT and Surface Pro sales, which sounds like a pretty solid showing until you consider the facts that it also wrote off $900 million and spent a small fortune advertising the devices. But if at first you don’t succeed… We have known for quite some time that Microsoft is prepping second-generation models and Nvidia CEO Jen-Hsun Huang on recently confirmed to CNET that his firm is “working really hard” on the new processor that will power the Surface 2. He also revealed that the second-generation Surface RT will support Outlook, pointing to the addition of Microsoft’s class-leading email program as a key differentiator compared to the first Surface RT.
While the iPad is a very profitable business for Apple, the Surface tablet cost Microsoft almost $1 billion last quarter. But that won’t stop the Redmond, Washington-based software giant from firing more shots at Apple’s slate in a new Surface RT advertisement. Hey, it worked for Samsung so why not? Microsoft’s recent tablet ads haven’t been shy in poking at the iPad’s shortcomings and its latest spot follows suit. Simple and straightforward, the new ad runs through a list of things the Surface RT does better than Apple’s tablet, and then it encourages people to “Work easy. Play hard.” by purchasing a new Surface RT for just $350. By comparison, Apple’s latest iPad starts at $499. The full video is embedded below. More →
Microsoft positioned its Surface as a competitor to Apple’s iPad and if that is indeed the case, Microsoft has failed miserably. In documents filed with the Securities and Exchange commission on Tuesday, Microsoft stated that it earned $853 million in revenue from Surface sales during the fiscal year ended on June 30th, 2013. That figure doesn’t include the $900 million write-down it took or the huge amount of cash it spent on marketing and advertising, so Microsoft has clearly lost a substantial amount of money on its Surface bet so far — yes, the Surface is officially a flop. More →
There is little doubt now that Microsoft’s Surface tablet was a huge flop. Alongside an earnings miss that sent Microsoft’s share price plummeting, the company recently said it took a massive $900 million charge related to the Surface RT. The reasons for the Surface’s slow sales are indeed many and industry watchers regularly point to Windows RT as the tablet’s main pain point, but a recent New York Times blog post points to one reason in particular in an effort to explain why the Surface failed while Apple’s iPad continues to be a huge success: Consumers are impatient. More →
Microsoft made several curious decisions in selling its first-generation Surface tablets last year but one of the most questionable was the decision to initially only offer the Surface in its own retail stores, a move that seems especially strange because Microsoft only had 32 outlets nationwide last holiday season. Although the company has since expanded the Surface to more retailers, it apparently still isn’t taking full advantage of all the resources it has at its disposal to get the Surface into customers’ hands. More →
Microsoft’s debut Surface RT tablet hasn’t been the runaway success the company was hoping for, so Microsoft recently slashed the price of the tablet — just as we expected. The sleek Windows RT slate now starts at just $350, down 30% from the old $500 base price, but sales aren’t expected to pick up much despite the drastically reduced pricing. Digitimes’ anonymous supply chain sources say that prices on Android tablets and touchscreen Windows laptops have also seen significant drops and as a result, third-quarter Surface RT sales aren’t expected to pick up much, if at all. Microsoft is expected to unveil a refreshed line of Surface tablets later this year or early next year.
In an effort to boost disappointing sales, Microsoft has decided to cut the price of its entry-level Surface RT tablet to just $350, unnamed sources tell The Verge. Under Microsoft’s new pricing scheme, the 32GB Surface RT will cost $350 as a standalone device and $450 with the Touch Cover keyboard, while the 64GB Surface RT will cost $450 as a standalone device and $550 with a Touch Cover keyboard. Microsoft is planning to release new versions of the Surface sometime in 2014, so that’s likely at least part of the reason it’s choosing to cut the price. The bigger question, though, is whether Microsoft plans to keep these competitive prices intact for its next generation of Surface RT devices or if it still plans to charge $600 for the new Surface RT and Touch Cover models when they release next year.
Microsoft isn’t letting disappointing first-generation sales stop it from releasing new versions of its Surface tablet. ZDNet on Wednesday spotted a new Microsoft product roadmap slide for 2014, which the company is billing as its “biggest year for innovation ever.” Among other things, the slide promises new versions of both the Surface Pro tablet and the Surface RT tablet sometime next year. Although Microsoft didn’t go into many details about what the new Surface models would include, it did vow that they would at least feature “new accessories and accessory colors.” The slide should also put to rest the notion that Microsoft plans on giving up on Windows RT, its much-maligned tablet-centric operating system that has so far struggled to attract either consumers or OEMs.
Microsoft’s first Windows RT-powered Surface tablet wasn’t the rousing success the company had hoped for, but that won’t stop it from trying again with a second-generation model. Following reports that Microsoft slashed Surface pricing for schools in a likely effort to clear out inventory, Bloomberg has reported some details about an upcoming refreshed Surface RT tablet. The report claims Microsoft will go with Qualcomm’s Snapdragon 800 chipset to power the next Surface RT, though NVIDIA will supply chips “for some versions” of the new Surface. It is unclear how many versions of the slate there will be, or what the differences between them might be. Microsoft’s Surface sequel is expected to launch later this year.
It’s taken a while but Microsoft has finally realized that it’s futile to charge customers an extra $100 just so they can use a keyboard with their Surface tablets… for a limited time at least. CNET notes that Microsoft has started promoting a limited-time offer where users who buy a Surface starting on May 31st will get either the Touch Cover or the Type Cover click-in keyboard for free. We have no idea how long this offer will last but it wouldn’t surprise us to see it extended for a long period of time if it helps boost sales. As we said last year, Microsoft’s decision to charge an extra $100 for a keyboard was rather puzzling since the keyboard was billed as an essential part of the tablet and key differentiator from Apple’s iPad.
Microsoft is building a smaller Surface tablet according to multiple reports, and a new rumor on Thursday suggests it will feature a 7.9-inch display when it launches in late-June. Digitimes reports that Microsoft’s smaller Surface slate will make use of 7.9-inch display panels supplied by none other than Samsung Display, the one-time Apple supplier now in search of new clientele. The report also notes that despite the rising popularity of 8-inch tablets following the launch of Apple’s iPad mini, suppliers aren’t expecting much from the new Surface considering its predecessors’ sales performance.
If at first you dont’t succeed… Microsoft is reportedly developing a new Surface tablet with a 7.5-inch display. NPD DisplaySearch analyst Richard Shim told CNET on Thursday that an upcoming Microsoft slate will feature a 7.5-inch screen with 1,400 x 1,050 resolution, which works out to 223 pixels per inch. His supply chain sources say mass production schedules are currently being discussed, but the new Surface won’t launch this year. More →
Microsoft will reportedly unveil sequels to its first two Surface tablets at its Build developer conference, which is scheduled to run from June 26th through June 28th. Unnamed sources from Microsoft’s supply chain have told Digitimes as much, and they claim initial components for the Intel-based version of the next-generation Surface began shipping in late 2012. According to the report, the next-generation Surface tablets will be smaller than the current models, with screens measuring between 7 and 9 inches diagonally. An earlier report suggested that Microsoft is developing an “Xbox Surface” gaming tablet with a 7-inch 720p display and an ARM-based Texas Instruments processor, but it is unclear if this gaming device is one of the tablets mentioned in Digitimes’ report.