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Weak Sales Of Microsoft's Surface RT Tablet Force It To Take A $900 Million Writedown
Earlier this week Microsoft slashed the price of the Surface RT to $350, down from the original price of $499.
As a result of that price cut, the company is taking a $900 million charge, which is equal to a loss of $0.07 per share.
The charge reflects the new market value of the Surface RTs that are in Microsoft's inventory, the company's IR boss, Chris Suh explained to us over the phone.
He said Microsoft believes this new price point will help it start selling Surface RTs. He says Microsoft remains "100% committed" to the Surface business.
He also stressed that this was a Surface RT problem, not a Surface Pro problem. He says Microsoft doesn't have the same inventory issue with Pro. This suggests that Microsoft either ordered fewer Pros, or demand is better because it's a more powerful tablet and makes more sense for enterprises.
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