Microsoft (NASDAQ:MSFT) has been pummelled in the past few weeks due to its effort to join the tablet battle. The tech giant’s Surface failed to deliver and the company took a heavy blow. The company’s annual 10-K report, revealed the figures and its revelation isn’t good.

The Tablet Battle

Apple’s (NASDAQ: APPL) iPad has always been the top contender in this fight. When the news that Microsoft was training to take a head to head battle it caused quite a buzz and everyone anticipated a good fight. But when Surface entered the ring it barely landed a hit, and instead took massive blow as its sales were no near its expectations selling only a million tablets in March. The tech company had a $900 million setback from its Surface RT launch, and to add up the agony its $853 million revenue came from both Surface RT and Surface Pro sales. This is a major loss for the Microsoft considering it increased its advertising costs by $898 million associated primarily to Surface and Windows 8. This beating is enough to make CEO Steve Balmer an admission that Surface’s sales figures is not what they had anticipated, “We built a few more devices than we could sell,” Balmer confessed.

Well we have to acknowledge that Microsoft’s success in the hardware department isn’t really high and mighty as its only tangible good success story is the Xbox. It isn’t really a hardware manufacturer, so a high expectation would really be unfair to its investors. So it isn’t really much of a surprise that Surface is being more of a punching bag right now than an aggressive fighter as what it was meant to be.


Is Surface taking too much beating already? There has been a price reduction for the Surface Pro tablet by $100, or between 10% and 11%, dropping the 64GB model to $799 and the 128GB to $899 while Microsoft RT has already been reduced weeks earlier by 30% making its entry-level 32GB model selling for $349. Microsoft’s move of cutting the price for Surface may not be a real solution to boost its sales but it may assist it in raising its guard. However, the real question here is will it still have some time to land a counter-punch or will it just be a knockout? Microsoft recently hinted that it would refresh the Surface RT and Surface Pro models. There are rumors spreading that the Surface 2 will feature a 4G LTE connectivity and a 7-inch version will come up before Christmas to take on Google Nexus 7 and Ipad Mini. A good comeback product might do the trick to earn points in the scorecards and turn things around since clearly it can’t take any more punches. The tech world awaiting on what will Microsoft do to redeem itself from this stumbling block. But as of now, we might just hold our breath and wait if Surface can really make a counter-attack or will fall for a knockout.

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