TechCrunch
Ballmer Admits What We All Knew: Microsoft Built Far Too Many Surfaces
At an internal meeting, Microsoft CEO Steve Ballmer admitted that the company overproduced the Surface RT tablet, leading to its recent $150 per unit price cut. As quoted by The Verge’s Tom Warren, Ballmer plainly explained that the company “built a few more devices than [it] could sell.”
But we already knew that.
In its most recent quarterly earnings release, Microsoft took a $900 million charge relating to the Surface RT tablet line, essentially admitting that the inventory that it has on hand was not worth its previous internal valuation; you can’t cut the market price of a product that you have in a warehouse and not lower its value on your books. The write down cost Microsoft $0.07 per share. It missed expectations for the quarter.
Microsoft has been on a mission to clear Surface RT inventory for some time. As I wrote earlier this year, through a combination of giveaways and discounts, Microsoft was moving to liquidate what appeared to be mountainous superfluous unit volume of its ARM-based Windows tablet hybrid.
At that time, Microsoft released a bland statement, saying that the offers and handouts were in “response” to the “positive reaction” Surface had enjoyed since launch. That felt a bit backwards: If response had been so strong, why give away a single device or discount? Wouldn’t organic demand be sufficient? Well, as it turns out, reaction hasn’t been overly positive, so the entire argument was logically moot.
Ballmer said something else during the meeting that is a non-surprise: Microsoft is not selling as many Windows devices as it would like. We knew that, too. The figures released quarterly that describe the PC market are brutal — and dropping. Even Apple is suffering from declining Mac sales in the face of nearly insurmountable headwinds that it helped to create with its leadership of post-PC product categories.
Next-generation Surface devices are being designed and tested. I suspect that Microsoft learned its lesson regarding production volume: Prove product-market fit first, and then kick the afterburners.
Top Image Credit: BUILDWindows
It's Time To #DisruptEurope - Submit Your Battlefield Applications For Berlin Now
TechCrunch Disrupt Europe will be TechCrunch’s major international conference this October. Featuring global startups, influential speakers, VIP guests and breaking news, you will not want to miss out. But, if you are a new startup that wants to launch in front of TechCrunch’s writers on the Battlefield stage: We want to make sure you have filled out your Startup Battlefield application. Do it now. The deadline is approaching July 31, and the clock is ticking.
In addition to onstage panel sessions and fireside chats, Disrupt will feature Startup Battlefield and Startup Alley to the Arena Berlin venue.
Startup Battlefield competitors pitch their companies live and onstage to innovators, investors and influencers in the tech community. TechCrunch identifies emerging companies to demo and compete for a prize of €40,000 ($50,000) and the coveted Disrupt Cup, won previously by Mint.com, Yammer, Fitbit, and Dropbox. Companies can apply to enter Startup Battlefield now, and the deadline has been extended to July 31.
The Startup Battlefield will select 30 brand new startups to launch on stage in front of a panel of top VCs and other founders, coverage on TechCrunch and the winner gets the €40,000 prize. We review applications on a rolling basis, so it’s to your advantage to submit as soon as you can.
Due to strong demand, it’s unlikely that we will review applications more than once, so please don’t submit a draft application before you are ready.
All submissions are confidential unless otherwise permitted by applicants on the application form. PowerPoint slides and video demos are optional but highly encouraged. We reserve the right not to review applications without video demos based on application volume.
Startup Alley offers another way for early-stage companies to gain exposure with a setup that encourages both exhibiting and networking, and provides high visibility. Roughly 100 startups comprise Startup Alley with around 50 new companies demoing on Monday and 50 demoing on Tuesday. Startup Alley companies will have the opportunity to sign up for one on one conversations with the editorial staff of TechCrunch, also known as Office Hours.
Additional speakers and agenda details will be announced between now and the show – find all the latest information on the Disrupt Europe website.
Extra Early Bird tickets are available for a limited time. Click here to purchase before they sell out.
Our sponsors help make Disrupt happen. If you are interested in learning more about sponsorship opportunities, please contact our sponsorship team here sponsors @ techcrunch.com
Media inquiries by can be directed to John Nolan on john.nolan @ teamaol.com
U.S. To Russia: We Won't Kill Or Torture Snowden
The CrunchGov Essential is a scannable roundup of technology’s influence on the day’s big issues. Below a feature post, we present the most thoughtful, outrageous, and inspiring stories told through the web’s best content. Sign up for the morning newsletter here.
The U.S. has pledged not to seek the death penalty for NSA-whistleblower Edward Snowden. To persuade the Minister of Justice to give up Snowden, it appears that Eric Holder had to ironically assure Russian authorities that it will respect human rights.
“The United States would not seek the death penalty for Mr. Snowden should he return to the United States,” he wrote. “We believe these assurances eliminate these asserted grounds for Mr. Snowden’s claim that he should be treated as a refugee or granted asylum, temporary or otherwise.”
For good measure, he wrote that “Mr. Snowden will not be tortured. Torture is unlawful in the United States.”
Snowden is currently holed up in Moscow Airport, seeking asylum from the United States.
U.S. State Department employees tell me that the NSA spying affair is seriously harming their ability to negotiate human rights issues with authoritarian governments around the world. Apparently, the perception of hypocrisy does not put the U.S. in a compelling position.
The Essential: Anti-NSA Debate In Congress, Manning Trial Closes, Navy’s Kinect Sexual Assault Solution, FOD for Obamacare
Anti-NSA Debate [TechCrunch]
–Watch Congress debate whether the NSA’s dragnet spying operation should be defunded
Manning Trial Closes [TechCrunch]
Creepy having armed MPs in camo patrolling behind each row of reporters & looking over shoulders as we take notes on Manning trial today
—
Charlie Savage (@charlie_savage) July 25, 2013–The trial of Wikileaks Source Pfc. Bradley Manning ended yesterday
–Prosecutors argued that Manning leaked information out of lust for fame
–Manning faces life in prison for “aiding the enemy”
Using Kinect To Stop Sexual Assaults [Verge]
–The military awarded a contract to build a video game anti-rape simulator
–”The system will not use pre-programmed branching scenarios to determine the responses for the avatar. It will instead animate a human agent using a [Kinect] interface”
Funny Or Die Is Making A Pro-Obama Care Video [Mother Jones]
–Viral sketch comedy startup, Funny or Die, met with celebrities at the White House to design a pro-Obamacare video, aimed at getting young people to sign up for insurance.
Miscellaneous Funny:
Blink three times if you're being held against your will guys. RT @katetaylornyt: The Weiner volunteers at the forum. http://t.co/T8ve5Jlf0q
—
Andrew Kaczynski (@BuzzFeedAndrew) July 25, 2013
Twitter CEO Dick Costolo Will Take The Stage At Disrupt SF
Twitter CEO Dick Costolo wears many hats. Not only is he helping lead Twitter into its possible future as a public company, Costolo is a master at improv from his days as a professional comedian, and is a serial entrepreneurs who has sold companies to Google (Feedburner) and others. Which is why we are thrilled to announce that Costolo will join us for a discussion at Disrupt SF.
As Twitter heads down a path towards an eventual IPO, Costolo has been steering the company towards profitability via new ad products, with Twitter potentially hitting $1 billion in ad revenue in the coming year. Beyond supercharging the financials, Costolo has a unique approach to managing his fleet of over one thousand employees, and creating a distinct culture at a company that has been growing by leaps and bounds.
We’re excited to have Costolo take the stage along with other notable CEOs like Marc Benioff, Marissa Mayer, and Jeff Weiner. Much has changed for both Costolo and Twitter since hespoke at TC50 in 2009.
Disrupt SF takes over The San Francisco Design Concourse from September 7 to 11. Tickets are currently on sale here. If you are interested in becoming a sponsor, opportunities can be found here.
Dick Costolo
Twitter, CEO
Since October 2010, Dick has been the Chief Executive Officer of Twitter, where he is responsible for the growth and management of the overall business. Previously, as Twitter’s Chief Operating Officer, he oversaw monetization and day to day operations.
Before joining Twitter, Dick was co-founder and CEO of FeedBurner, a digital content syndication platform that was acquired by Google in 2007. While at Google, Dick was Group Product Manager on the Ads team responsible for social media ads.
Previously, Dick lived and worked in Chicago, where he founded and ran two digital media companies: SpyOnIt, a web page monitoring service, and Burning Door Networked Media, a web design and development consulting company. Dick was also an improv performer with the acclaimed Annoyance Theater.
He graduated from the University of Michigan with a B.S. in Computer Science. He is @dickc on Twitter.
[image Scott Beale / Laughing Squid]
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