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Oops: Ballmer Privately Talks of Tablet Missteps
Oops: Ballmer Privately Talks of Tablet Missteps

By Adam Dickter
July 28, 2013 9:05AM

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According to reports leaked this past week from an internal company meeting, Microsoft CEO Steve Ballmer confirmed Microsoft blundered by creating too many of its Surface RT tablets, pictured, and also said the company was worried about the pace of sales for devices running Windows 8. Microsoft has dropped the price on Surface tablets by $150.
 


The tablet market is a mixed bag for Microsoft these days, with its share rising in the first quarter of this year to 3 percent of the market. The bad news is the software pioneer and budding hardware maker was starting from zero at the end of 2012, according to numbers from Strategy Analytics.

While its Surface Pro Windows 8 tablets have gotten the Redmond, Wash.-based tech giant on the scoreboard, so to speak, the company appears to have blundered by manufacturing too many of its Surface RT devices, which run Windows RT, an operating system that appears similar to Windows 8 but will not run any legacy Windows software.

Regrets, They Have a Few

According to leaked reports that emerged this past week from an internal company meeting, Microsoft CEO Steve Ballmer confirmed the goof and also said the company was worried about the pace of sales for devices running Windows 8.

"We built a few more devices than we could sell," Ballmer reportedly told employees, according to sources who reportedly spoke anonymously with the The Verge Web site.

Second-quarter tablet market figures aren't complete yet. It will be interesting to see how the reported slip in iPad sales affected Apple's dominance in the market given the aggressive output of Samsung and others making Android-based tablets, and whether Windows tablets have gained.

Increasing Importance

With tablets having a huge impact on the PC market, getting a solid footing in that market is crucial. Microsoft saw profit of $19.9 billion in the most recent fiscal quarter, up 10 percent from the same quarter last year, but it is believed to have taken a $900 million hit after reducing the price of the Windows RT Surface tablets from $499 to $349.

"Microsoft is one of the oldest and most respected firms in the tech space, however they simply have not changed as the marketplace has changed," technology analyst Jeff Kagan told us on Friday. "That means they are not staying current with the needs of customers going forward."
 

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