Speculation Steve Ballmer might have been pushed following $US900 million Microsoft Surface RT disaster
Tuesday, August 27, 2013/
Speculation has surfaced Microsoft chief executive Steve Ballmer might have been pushed to resign following recent market failures at the tech giant.
ComputerWorld quotes analyst Patrick Moorhead, principal analyst with Moor Insights & Strategy, who believes Ballmer might have been asked to resign following
“They either drove him out, or put him in a situation where he felt he had to leave to save face,” Moorhead says.
“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.”
Moorhead cites the $US900 million writedown of the company’s Surface RT tablet as a key example of a poor strategic decision by Ballmer.
“It was the $US900 million write-down. That caught the attention of the board, and based on Ballmer’s over-enthusiastic public commentary on Windows RT and Surface RT, they lost a lot of credibility. So did Ballmer.
“How can you be that far off what consumers want? Was it that you’re not listening to your team? Was it because the team was afraid to give him advice? Was it because the team saw a different reality? Or was it that the team lacked the skill set to anticipate the failure?”
As SmartCompany reported last month, Microsoft announced a massive $US900 million writedown on the value of unsold Surface tablets.
The $US900 million charge relates to unsold inventory of the consumer version of its Surface tablet, which uses an ARM processor rather than an x86-processor from Intel and runs a special version of its operating system, known as Windows RT.
The inventory writedown came less than a week after Microsoft announced a large price cut of $US150 for the struggling product line.
The company managed to sell just 900,000 of the tablets during each of its first two quarters on the market, representing less than 1.8% of the market.
In contrast, Apple sells around 14.6 million iPads per quarter, while Samsung sells around 8.8 million.
Microsoft also revealed it has spent $US898 million advertising the Surface and Windows 8, while the company has only generated $US853 million in sales of the troubled product line since, meaning a maximum of just 1.7 million unit sales in total.
The company is currently sitting on an inventory of unsold tablets estimated to number around 6 million units.
Other products widely viewed as failures launched under Ballmer’s watch include Windows Vista, the Zune and the Kin mobile phone.