Microsoft announces yet another Surface tablet, despite $US900 million in writedowns

Microsoft has announced plans to release a new line of Surface tablets, despite the company suffering a massive $US900 million writedown on unsold inventory of the first generation of the device.

According to the company, the Surface 2 will feature an NVIDIA Tegra 4 processor, 10.6-inch full HD display, a 3.5-megapixel front camera and 5-megapixel rear camera.

The device will have a starting price of $US449 and be available in both 32GB and 64GB versions.

The company has also announced a version compatible with the desktop version of Windows, called the Surface Pro 2, with a starting price of $US899.

The devices will run Windows RT 8.1 and Windows 8.1 Pro, with Australia named as one of 22 initial markets for the device.

The company is currently promising an in-store date of October 22.

In August, Microsoft revealed it has spent $US898 million advertising the first generation Surface tablet and Windows 8, on top of its recent $US900 million writedown of unsold Surface tablet inventory.

In contrast, the company has only generated $US853 million in revenues off the troubled product line since its release, meaning a maximum of just 1.7 million unit sales [assuming all units were sold at the low-end release price]. In contrast, Apple sells around 14.6 million iPads per quarter, while Samsung sells around 8.8 million.

As SmartCompany recently reported, Microsoft is currently sitting on an inventory of unsold tablets estimated to number around 6 million units.

The news led some leading analysts, including Patrick Moorhead from Moor Insights & Strategy, to believe Ballmer might have been asked to resign following the poor performance of the device.

“They either drove him out, or put him in a situation where he felt he had to leave to save face,” Moorhead said.

“Typically, a board will be working behind the scenes for a replacement, but they’ve given themselves 12 months. I think this went down very quickly.”


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