Microsoft recently took nearly a billion dollar charge and reduced the price of the SurfaceRT to $350. It appears the price point has helped move some units of the SurfaceRT with Walmart now out of stock of the device. Walmart expects to have more units on hand within the week.
Directions on Microsoft analyst Michael Cherry notes:
The $900 million write-down also included parts and accessories, Cherry noted. And many forget that Apple is the master of tying up critical elements of components the company needs in order to build an adequate supply of consumer electronics.
“When Microsoft decided to step into the world of building tablets I wondered how this differed from what they already built (mice, keyboards, and Xboxes),” said Cherry. “I assumed that a lot of money went into: a) buying parts; b) buying time in a plant; and c) building sub-components such as milling the metal chassis that they were going on about so much.”
Because Microsoft was intent on keeping its Surface RT plans secret, Cherry said he assumed a lot of the company’s component/part purchasing was done at the last minute, and therefore, “had to cost a lot.” In some cases, Surface parts might have been shipped by air rather than container ship, for example, in order to meet last-minute deadlines.
“They also likely had to pay a lot to hold capacity open in case it really took off, which now, there may not be a need for,” Cherry added.