Ballmer Admits What We All Knew: Microsoft Built Far Too Many Surfaces

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At an internal meeting, Microsoft CEO Steve Ballmer admitted that the company overproduced the Surface RT tablet, leading to its recent $150 per unit price cut. As quoted by The Verge’s Tom Warren, Ballmer plainly explained that the company “built a few more devices than [it] could sell.”

But we already knew that.

In its most recent quarterly earnings release, Microsoft took a $900 million charge relating to the Surface RT tablet line, essentially admitting that the inventory that it has on hand was not worth its previous internal valuation; you can’t cut the market price of a product that you have in a warehouse and not lower its value on your books. The write down cost Microsoft $0.07 per share. It missed expectations for the quarter.

Microsoft has been on a mission to clear Surface RT inventory for some time. As I wrote earlier this year, through a combination of giveaways and discounts, Microsoft was moving to liquidate what appeared to be mountainous superfluous unit volume of its ARM-based Windows tablet hybrid.

At that time, Microsoft released a bland statement, saying that the offers and handouts were in “response” to the “positive reaction” Surface had enjoyed since launch. That felt a bit backwards: If response had been so strong, why give away a single device or discount? Wouldn’t organic demand be sufficient? Well, as it turns out, reaction hasn’t been overly positive, so the entire argument was logically moot.

Ballmer said something else during the meeting that is a non-surprise: Microsoft is not selling as many Windows devices as it would like. We knew that, too. The figures released quarterly that describe the PC market are brutal – and dropping. Even Apple is suffering from declining Mac sales in the face of nearly insurmountable headwinds that it helped to create with its leadership of post-PC product categories.

Next-generation Surface devices are being designed and tested. I suspect that Microsoft learned its lesson regarding production volume: Prove product-market fit first, and then kick the afterburners.

Top Image Credit: BUILDWindows

Shelly Palmer Radio Report – July 16, 2013

If you’ve been waiting for a price drop to buy a Microsoft Surface tablet, your time is now. Microsoft recently announced a significant price cut in its entry-level Surface RT tablets. These are the less powerful Surface tablets on the market, and don’t run the full version of Windows 8. However, the Surface RTs are decent in their own right, and are now $150 cheaper. A 32 gig model now runs $349, and doubling the storage to 64 gigs will cost $100 more at $449. The price cut was likely the result of a few factors, including poor sales numbers and new models likely to hit store shelves later this year. The line of Surface tablets has yet to truly take off, but Microsoft is rumored to be debuting new accessories for the Surface soon, including a battery-equipped keyboard cover. If you’re looking to try out a lite version of Windows 8 or are just looking for a mid-range tablet option, the Surface RT is now available at $349, its lowest price ever.

Is Microsoft Working on a Surface Mini?

Just because Microsoft’s first Surface devices shipped with 10.6-inch displays doesn’t mean the company is wedded exclusively to the large tablet form factor. In fact, it almost certainly isn’t. During his appearance at the Goldman Sachs Technology and Internet Conference on Wednesday, Microsoft CFO Peter Klein said the company is ready, willing and able to bring a range of new form factors to the mobile device market. It’s ready to go smaller, with a device akin to the iPad mini. And it’s ready to go larger, as well. And whether it chooses one route or the other – or both – will likely be determined by the consumer. “We’re set up for that,” Klein said of extending Windows to devices of varying size. “The notion of flexibility and scalability of the operating system is intrinsic to our strategy.” Specifically, Windows 8 and Windows Phone 8 share the same kernel.

Read the full story at All Things D.

Surface Pro 64GB to start at $899, coming in January

Surface Pro

Microsoft’s Surface RT release has left many people, myself included, yearning for a more powerful machine with Windows 8 Pro on board. The Surface Pro has been teased, but never officially announced until now. In January, Microsoft will begin selling the 64GB Surface Pro for $899, with a 128GB version for $999. The Surface Pro is nearly identical in design to the already existing Surface RT, but what you find under the hood and running on that SSD is a lot more impressive.

Staring with a 1920×1080 resolution ClearType display with a Mini DisplayPort that can push 2560×1440 thanks to the onboard Intel HD Graphics 4000, the Surface Pro is a big bump in specs compared to the RT. Coupled with a Core i5 and 4GB of RAM, the Surface Pro more closely resembles last year’s Ultrabooks opposed to what you would typically expect to see in a tablet. This is all pretty close to what we expected to see in the Surface Pro, including the Surface pen, USB 3 port, and 2×2 MIMO WiFi antennae. The trade-off for this hardware is a slight increase in weight, and while Microsoft wasn’t willing to provide an exact figure, they noted that the tablet was still less than two pounds and 14mm thick.

Finally, the Surface Pro will come with Windows 8 Pro optimized for this hardware. This resolves many of the issues that users found with Surface RT, especially the inability to install apps from places other than the Microsoft Store. Surface Pro will function in Desktop Mode as a touch Ultrabook, and as a tablet when you choose to use Modern UI. It also means you could just take advantage of the great hardware and install a Start Menu replacement if you want to ignore Modern UI altogether.

Microsoft hasn’t announced what day in January the Surface Pro will release, or if pre-orders will be made available. The Surface RT launch featured pop-up stores in major cities, and there are now Surface Kiosks in every mall I have been to in the last month. Microsoft will undoubtedly leverage these same resources for the release of the Surface Pro, and with any luck the relatively poor opinion of the Surface RT will not stop early adopters from trying the new PC out.

Read more at the Microsoft Blog

10 reasons to embrace Windows 8 now

Windows 8

The switch has been flipped, Windows 8 is now upon us. Manufacturers will soon fill the shelves of your local big box store with new computers of every shape, size, and orientation running Windows 8. The holiday season will no doubt be filled with incredible deals on machines to encourage you to make the upgrade to some new hardware. Of course, if you don’t need new hardware, Microsoft offers a Windows 8 upgrade tool on their website. With everything Microsoft is offering to encourage uptake, it’s pretty easy to see why you would want to embrace Windows 8 now. If you’re not convinced, here’s a few reasons why it’s worth considering.

Inexpensive, for now

Historically, Windows upgrades have been a little on the pricey side. If the next version didn’t offer some killer feature, chances are it wasn’t worth shelling out the cash for the update on the day it came out. Windows 8, however, is starting out at $39.99 for anyone running Windows 7. All you need to do is download the update tool from Microsoft, send them some money, and when your PC reboots it will be running Winodws 8 with all of your files still intact. The $39.99 price tag is something of an early adopter rate, in January the $70 price tag you see in stores will apply for the download version, too.

Free Media Center Pack

One of the increasingly common uses of Windows machines is to have a Home Theater PC setup. If you aren’t running something like XBMC, chances are you’re running Windows Media Center. If you want things like DVD and Blu-ray codecs, you need Media Center on your Windows 8 machine. In Windows 8, you’ll need to pay a little extra for the Media Center Pack, unless you go with the Pro version. If you don’t feel like the Pro version is necessary, but still would like to grab Media Center, the pack will be free until January. This offer is available to both digital and physical disk upgrade users.

Windows 8

SkyDrive Integration

With smartphones, tablets, and PCs connected all the time, it feels natural to want access to all of your files from all of these devices. With the centralized user experience Microsoft has been pushing out to their products, the easiest way to complete that experience would be to allow your documents and photos to exist seamlessly across the platform. Microsoft’s SkyDrive has been deeply integrated into both Windows Phone and Windows 8 to offer exactly this. You can store all of your documents, photos, even game save data to your SkyDrive and access the information from anything that can connect to Microsoft’s cloud storage service.

Centralized User Experience

Price and free things are always a good reason to upgrade if you are on the fence, but the truth is Microsoft is putting all of their eggs into this new basket. If you are a Windows 8, Windows Phone 8, or Xbox 360 user, you’re going to see the new user interface that Microsoft has implemented. Microsoft has made their user experience across all of their devices as seamless as possible. The tiled UI has been slowly making its way across Microsoft’s product line, finally ending with Windows 8. If you own multiple Microsoft products, the entire experience will look and feel the same.

Windows 8

Surface

Windows 8 is more than just a step forward for Microsoft software, it also marks the very first computer that has been built by the company. Surface was designed around Windows 8 to create a unique experience for the new OS. The $399 price point for a Surface RT is a steal for anyone looking for a new way to compute, and the soon to be released Surface Pro offers a no compromise solution for any user looking to get the best of both the PC and tablet worlds right now. The Surface hardware is incredibly high quality and a good first step into Windows 8, as well as the best way to enjoy the new OS the way Microsoft intended.

Performance

In theory, each version of Windows is going to offer a performance boost of some kind over the previous version of the OS. This isn’t always the case, as Windows Vista users can attest, but with Windows 8 the difference is all too clear. Everything from boot time to complex multitasking operations are noticeably faster on Windows 8. The OS breathes life into older machines, and the startup time on more recent machines alone is often reason enough to make the switch. Everything that has been tested so far has been much faster.

Windows 8 Exclusives

As is the case with any new OS, there will be Windows 8 software exclusives. Microsoft has accomplished this with the Windows Store, which serves as a destination for Windows 8 specific apps as well as interactive live tiles for the home screen. Especially if you have a touch enabled device, Windows 8 will grant you access to a significant number of apps that are exclusive to the platform.

If the apps aren’t exclusive, they are highly stylized to take advantage of the Windows 8 UI. The Netflix app for Windows 8 is a perfect example, and the design for this app is significantly improved over the UI used on iOS or Android. There are many apps that flow nicely and just plain look better on Windows 8 as a result of the new UI.

Backwards Compatibility

Windows 8 looks and feels very different from previous versions of Windows at first glance. Once you tap that Desktop tile, though, it’s like you never left Windows 7. The Desktop UI allows you to use all of your software from previous versions of Windows. On top of that, Microsoft has added compatibility modes to make sure the programs behave as close to their original design as intended.

This is only available on Windows 8 and Windows 8 Pro, however. Windows RT, being an ARM based version of the OS, isn’t quite as backwards compatible. Windows RT is limited to apps from the Microsoft Store, and that is unlikely to change anytime soon.

Security

For a number of reasons, Windows has a reputation for being the least secure of the PC operating systems. Many users run everything as Administrator, and the volume of users makes the platform a huge target for malicious software. Over the last few years, Microsoft has been developing tools like the User Account Control system to help prevent crippling OS damage. With Windows 8, security was clearly a priority.

Aside from UAC, Microsoft has included services like Windows Defender by default. This is the first version of Windows to come pre-installed with antivirus software, and Microsoft has developed their own tools instead of relying on a third party to protect the OS. Windows 8 is far from impenetrable, and you can install other services if you feel they would be more effective, but the platform as a whole will hopefully be much more secure moving forward.

Windows 8

Xbox Live and Smart Glass

Microsoft’s Xbox 360 console has grown significantly since its release. The gaming console almost doubles as a set top box now, offering streaming content and social interaction as well as access to massive digital content libraries. Windows 8 scoops up the best of these add-ons and makes them available on your PC with the same interface. Xbox Live social features, like chatting with friends or playing games against one another for achievements, are integrated into Windows 8 as well.

Then there’s Smart Glass, which allows you to control your Xbox 360 from your Windows 8 computer. You can push videos, music, and websites to the service as long as you and the Xbox are on the same network. Smart Glass is available on Windows 8 and Windows Phone 8, so you can sync this content across the entire product line.

Final Thoughts

Windows 8 is well worth the upgrade, and there are some pretty great incentives for pulling the trigger sooner rather than later. As Microsoft moves forward with this new user experience, there will only be more reasons to upgrade, with the eventual goal of everyone moving to the new platform.

As we look back at the now 11 year old Windows XP, moving to the wildly different Windows 8 forces you to embrace a lot of changes all at one. Once you move in, however, you see that most of the changes are undeniably for the better.