Emerging Technology

Surface sells, but who’s buying? Another $US100 price cut as Microsoft struggles to clear inventory

Andrew Sadauskas /

Microsoft has announced another price cut in its troubled Surface range of tablets, just weeks after announcing a $900 million writedown in the value of its unsold inventory, as the company struggles to shift an unsold inventory estimated at six million units.

The tech giant has announced a US$100 discount on the US price of its Surface Pro tablets, just weeks after cutting prices on its consumer-targeted Surface RT tablets. The discount is being offered as a limited time offer until August 29.

Microsoft is estimated by leading analysts to have sold 900,000 tablets during each of its first two quarters on the market, representing less than 1.8% of the market, in stark contrast to Apple on 14.6 million units and Samsung on 8.8 million.

Meanwhile, as SmartCompany reported in October last year, Microsoft is believed to have ordered production runs of between three and five million units per quarter, similar in volume to the Google Nexus 7 tablet and the Amazon Kindle Fire.

A number of leading analysts, including David Gilbert and Alex Wilhelm, estimate the tech giant might be sitting on an unsold inventory of around six million units (the $US900 million write-down believed to consist of around six million units at $US150 each).

Last week, Microsoft revealed it had spent $US898 million on advertising its consumer Surface tablets, running Windows RT, which came on top of a $900 million inventory writedown as Microsoft announced a large price cut of $US150 on the Windows Rt-based consumer version of its tablets.

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Andrew Sadauskas

Andrew Sadauskas is a former journalist at SmartCompany and a former editor of TechCompany.

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