I think everyone thought Acer was crazy when they told Microsoft back in August to stay out of the tablet industry. However, days after the launch of the latest line of Windows 8 and WinPho 8 products, including the Surface RT, Microsoft's President of Windows, Steven Sinofsky, left the company, which clearly meant Ballmer & Co. believed that the launch of the Surface RT either could have been better or that RT in general was a bit crazy. It appeared that Sinofsky seemed confident RT would take off and excel well in the market, however the numbers from this week's earnings call leads us to believe Microsoft was right in removing Sinofsky from his position.
Microsoft took a charge-off on the remaining Surface RT inventory, along with their recent discount adjustments for Q3 ending June 30th that came to a total price of $900 million. That's quite a big number, even considering that some of it was for the sharp price cut of the devices just two weeks ago. Amy Hood, CFO for Microsoft, also noted that the charge-off includes an unspecified number of components purchased, which we can assume is for parts that haven't been used to build new Surface tablets and also for accessories.
In regards to the announcement, Hood commented on the state of the company as a whole.
Steve Ballmer, who's still around for now, added,
With the rumored Surface Mini and Surface 2.0 right around the corner, it doesn't surprise me that Microsoft is clearing out and taking back all of the first-gen devices. Plus, with the Ballmer-mentioned company restructuring and realignment, it's going to take a quarter or two to see any real changes reflected in sales number. For now, all we can do is sit back and wait, and hope that we see some new hardware in the near future. Until then, enjoy the latest Microsoft ad against the iPad after the break. It's the best one yet, and includes the iPad questioning its attractiveness.
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