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Microsoft (MSFT +0.5%) appears bent on unloading Surface inventory: the software giant is now...

Microsoft (MSFT +0.5%) appears bent on unloading Surface inventory: the software giant is now offering a free Touch or Type Cover (they normally go for $120/$130) with a Surface RT purchase, and will be selling RT and Pro models for a respective $100 and $399 to attendees at next week's TechEd conference (the tablets normally start at $499 and $899). The discounts could be due to weak demand, a pending hardware refresh (reportedly due at the June 26-28 BUILD conference), or both.
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  • wigit5
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    Sounds intelligent....
    31 May 2013, 02:57 PM Reply Like
  • Michael Blair
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    Or, possibly, they are using their excellent tablets as spifs to promote the TechEd conference. It is not always necessary to put a negative spin on Microsoft's actions. It is an excellent company with first class products.

     

    I suppose when any major brand promotes its products you can find something to criticize, but I prefer to think it is just good marketing.
    31 May 2013, 03:18 PM Reply Like
  • Transcripts&10-K's
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    "It is not always necessary to put a negative spin on Microsoft's actions"

     

    You must not read many of these Market Currents - SeekingAlpha almost always puts a bit of negative slant on MSFT news; a great example is how they report on Google Docs (with low single digit market share) compared to something like Bing (with high teens market share in the US and growing).

     

    Funny thing is that Google gave away Chromebook Pixel's to all I/O attendees - but SA had nothing to say. Here's what they said about Chromebooks during I/O:

     

    "Google tries to bolster the Chromebook's education market momentum by launching Play for Education, a custom app store for schools/students."

     

    How much market share do Chromebooks have again? They forgot the snarky comment like they use with Microsoft:

     

    "Windows 8/RT (MSFT) is believed to have a 7.4% share, but that only amounts to 3M units."

     

    One doesn't have to look far to see SA editors show their true colors on MSFT & GOOG...
    31 May 2013, 03:59 PM Reply Like
  • wigit5
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    I don't know that I would say it that strongly but SA does seem to have a negative sentiment towards MSFT... which would make them just a few more sheep in the herd of people negative on MSFT.

     

    history will judge if they were right/wrong though
    31 May 2013, 04:05 PM Reply Like
  • Transcripts&10-K's
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    Not trying to be harsh, just honest - you've noticed it as have others; I simply wanted to point to one or two quick examples (and it didn't take going back beyond a week or two) that were particularly noticeable.
    31 May 2013, 04:12 PM Reply Like
  • SA Editor Eric Jhonsa
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    "You must not read many of these Market Currents - SeekingAlpha almost always puts a bit of negative slant on MSFT news"

     

    If you really think that, you haven't been paying close attention. Do these look like negative posts to you?

     

    http://seekingalpha.co...
    http://seekingalpha.co...

     

    Those are just two recent ones. There are plenty of older posts that also feature positive news/commentary.

     

    And dwelling on the conference discount overlooks the bundling of Touch/Type Covers with RT purchases. Regardless of the specific reason, Microsoft is clearly looking to lower Surface inventories.
    31 May 2013, 04:15 PM Reply Like
  • Transcripts&10-K's
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    Eric,

     

    Certainly not suggesting SA has never said anything positive on MSFT (or in this case, quoting an analyst doing so); I was simply noting the negative sentiment towards MSFT that is much more common than with other companies - say, Google. The word sentiment is key; SA reports news on both (positive and negative), then adds a bit of their own commentary.

     

    The way you report on Chromebooks is clearly different than how you talk about Microsoft's push in the tablet space; I noted before how that same thing is apparent in Bing vs. Google Docs. I think it's quite apparent - but maybe that's just me...
    31 May 2013, 04:29 PM Reply Like
  • SA Editor Eric Jhonsa
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    You're entitled to feel that way if you'd like, but I don't really see a difference in how Microsoft and Google (or Apple, Facebook, Cisco, etc.) are covered. Just to use your Chromebook example, there have been posts that clearly made note of the challenges Google is facing here.

     

    http://seekingalpha.co...
    http://seekingalpha.co...

     

    Microsoft has had its share of bad news over the last year in the PC and mobile spheres, and a lot of that has been covered here. But the same goes for its successes in other areas (Server & Tools, Azure, Android licensing, etc.).
    31 May 2013, 04:43 PM Reply Like
  • Transcripts&10-K's
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    You're entitled to feel that way as well; I think the large number of posts (certainly not all) show this negative sentiment, as noted by others as well.

     

    "Microsoft has had its share of bad news over the last year in the PC and mobile spheres" - as Google's had with Chromebooks and Google Docs, both of which have failed to make any real dent in Microsoft's dominance of those spaces (while Bing continues to gain share, slowly but surely, on Google's crown jewel - a trend that will only continue with Windows 8.1).

     

    You might note that those are longer term investments - like Win8 is for Microsoft in the tablet space. Many think that 7.4% tablet share in Q1 (ahead of IDC estimates for the full year by a wide margin) and solid smartphone share gains were a good start, and easily ahead of Google Docs/Chromebooks market share in their comparable markets; SA takes a more negative view, because that's "only" 3M units in tablets.

     

    I guess that Docs & Chromebooks are really struggling...
    31 May 2013, 04:55 PM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
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    If you're going to focus on posts that feature bad news or critical opinions, you'll naturally find reasons to assume bias. But I can just as easily point to posts featuring positive news/opinions about Office, Azure, Hyper-V, Android licensing, the Xbox, and even Windows 8 and Windows Phone.

     

    "Bing continues to gain share, slowly but surely, on Google's crown jewel"

     

    On a global level, that's not true. StatCounter's data shows Google's share holding steady (and far above Bing/Yahoo's). I suspect this is due to Google's dominant mobile search position offsetting any PC share losses.

     

    http://bit.ly/16x9sRm

     

    "SA takes a more negative view, because that's "only" 3M units in tablets."

     

    You can disagree here, but I don't think 3M was impressive considering how many major OEMs launched Windows 8/RT hardware, starting in Q4. Also, while Strategy Analytics estimates 3M, IDC thinks only 1.8M units were shipped.

     

    http://seekingalpha.co...

     

    With all that said, I think Windows 8's tablet share will grow in time (RT remains a question mark).

     

    "I guess that Docs & Chromebooks are really struggling..."

     

    I have my doubts Chrome OS will see much success outside of a few verticals such as education, but it's much less important to Google's future than the tablet OS market is to Microsoft's. Especially given Android's mobile success. If I was Google, I'd be more worried about iOS, e-commerce ad competition (Amazon/eBay), and maybe social search (Facebook/Twitter) than how Chrome OS fares.
    31 May 2013, 07:26 PM Reply Like
  • Transcripts&10-K's
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    "If you're going to focus on posts that feature bad news or critical opinions, you'll naturally find reasons to assume bias."

     

    I'm simply responding to what I see on average (yet again, as others have noted as well), and used those as examples - as noted earlier, I had to go back a few short weeks to find those two that I recently remembered; I'm not going to go back through all the posts and cite every example, as we both surely have better things to do.

     

    When I start seeing posts about Google "unloading inventory" when they give away devices at conferences (versus Microsoft charging hundreds of dollars in this case), I'll really start to believe it.
    31 May 2013, 08:07 PM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
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    Like I said, you're completely overlooking the part about the free Touch/Type Covers with Surface RT purchases (not just for conference attendees), which is definitely a bigger deal. If you're set on finding bias at a given news source, it's easy to confirm your belief by focusing on just part of the coverage.

     

    I've already seen accusations of bias against Apple, BlackBerry, Nokia, Google, Facebook, and several other companies. I hope you can see how absurd such claims are when taken in aggregate.
    31 May 2013, 11:20 PM Reply Like
  • Justin Jaynes
    , contributor
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    http://bit.ly/R3bG0H

     

    It's a psychological phenomenon called availability heuristic, or so says the EE undergrad random contributor.

     

    Win 8 tablets *should* start seeing incredible growth with Temash/Bay Trail.

     

    My article explaining why:
    http://seekingalpha.co...
    1 Jun 2013, 12:05 AM Reply Like
  • Transcripts&10-K's
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    "Like I said, you're completely overlooking the part about the free Touch/Type Covers with Surface RT purchases"

     

    So you were referring to a 30-day promotion that works out to what, a 15-20% discount? I didn't know that anytime a company used promotions to drive demand, they were in a precarious position to offload inventory. That's the thing - you don't say Microsoft is looking to drive Surface sales (likely the case); you add the comment that it's tied to unloading inventory - the negative segment that I'm referring to.

     

    Your second point to substantiate the claims made was the deal for conference attendees. Google giving away Pixel's (a device that cost $1,000+) is an even more notable example of that same idea - yet you never even noticed that when it happened. Do you think that Google gave away the devices due to weak demand (and by your implications, an inventory glut) - your first conclusion on Microsoft's discounts?

     

    Maybe you don't think that the second part applies anymore and the type cover discount is only applicable? Or do you see something different between what Microsoft & Google did?
    1 Jun 2013, 06:29 AM Reply Like
  • SA Editor Eric Jhonsa
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    "you add the comment that it's tied to unloading inventory - the negative segment that I'm referring to."

     

    I said it appears that way, not that they definitely are (only Microsoft knows that for sure). I stand by that.

     

    And once more, you're looking at only half the story to find signs of bias. I noted Microsoft's moves could also be due to upcoming Surface refreshes rather than any demand issues, or maybe a combo of the two. A BUILD conference refresh announcement, btw, could also help explain why the Touch/Type Cover discounts are for 30 days.

     

    "Google giving away Pixel's (a device that cost $1,000+) is an even more notable example of that same idea - yet you never even noticed that when it happened."

     

    As you may have noticed, there was a deluge of Google-related news during the first day of I/O. The focus was on covering the most important items. And Google didn't announce any Pixel discount for non-attendees. Not to mention the Pixel (which I think is a niche product at best) hasn't been given a fraction as much attention by Google as Surface has been given by Microsoft. But again, if you want to find bias, there are always ways to find confirming details.
    1 Jun 2013, 02:10 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (643) | Send Message
     
    "I said it appears that way, not that they definitely are (only Microsoft knows that for sure). I stand by that.

     

    And once more, you're looking at only half the story to find signs of bias."

     

    That's because half the story - one of your two points - is nonsense because it's common industry practice - would you admit that? Or do you think for Microsoft the discount to attendees is a sign of unloading inventory? If it is, do you draw the same conclusion for Google at I/O?
    1 Jun 2013, 07:17 PM Reply Like
  • SA Editor Eric Jhonsa
    , contributor
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    Try reading more carefully. The "half the story" comment was about whether Microsoft's moves have to do with soft demand and/or a product refresh (your past comments suggested I only raised the former possibility, which wasn't the case), not about the specific discounts.

     

    Also, it goes without saying that Microsoft could easily have provided some other kind of giveaway to TechEd attendees. The fact the conference discount coincides with Touch/Type Cover bundling represents a pattern, one that just happens to emerge amidst reports of an upcoming Surface refresh. Hardly a sign of bias to view the two actions in tandem as a likely sign of inventory-clearing efforts.

     

    You seem intent on splitting hairs in order to justify a preconceived opinion. Feel free to have the last word.
    2 Jun 2013, 04:53 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (643) | Send Message
     
    "The fact the conference discount coincides with Touch/Type Cover bundling represents a pattern, one that just happens to emerge amidst reports of an upcoming Surface refresh. Hardly a sign of bias to view the two actions in tandem as a likely sign of inventory-clearing efforts."

     

    What other device would they have given away, if you don't mind me asking? Surface seems like the clear choice, no?

     

    "You seem intent on splitting hairs in order to justify a preconceived opinion."

     

    I don't have any notion about Surface inventory and very little data on sales (from the third party data we both know about); you're the one who concludes in your first point of this blurb that they're bent on unloading inventory. My point is exactly that we don't know; in my opinion, your unsubstantiated conclusion is drawn from two relatively weak arguments - one of which is nonsensical when compared to common practices.

     

    Thanks for taking the time to respond.
    3 Jun 2013, 09:35 AM Reply Like
  • KevinRemde
    , contributor
    Comments (343) | Send Message
     
    Yes, thank you, Michael. I was about to say that. Microsoft almost always gives attendees to its major conferences some kind of benefit or incentive.
    31 May 2013, 03:23 PM Reply Like
  • Justin Jaynes
    , contributor
    Comments (2886) | Send Message
     
    Hopefully the hardware refresh is either temash/kabini tabs or Haswell ULV tabs. I really want some new hardware.
    31 May 2013, 04:22 PM Reply Like
  • karenfejta
    , contributor
    Comment (1) | Send Message
     
    There may be more negative SA articles than positive, BUT looking at the bright side, there ARE many positive articles, the sheer volume of articles (positive, negative, or neutral) on MSFT are an indication of their continued strength as a company/brand, AND we all can choose to spread any positive news/spin we see via our own social media channels. Without this kind of article, who would be thinking about Surface today anyway?! :)
    31 May 2013, 04:42 PM Reply Like
  • Rookie IRA Investor
    , contributor
    Comments (2537) | Send Message
     
    Giving decent discounts to conference attendees on Surface products hardly suggests that they can't make enough to meet demand.
    1 Jun 2013, 08:12 AM Reply Like
  • cereal
    , contributor
    Comments (621) | Send Message
     
    I have a Surface RT and it's been smooth and fast and a joy to use. They're practically giving it away, this is ridiculous, this is deflation (I hate deflation, it causes things like The Great Depression and The Great Recession).
    2 Jun 2013, 03:21 AM Reply Like
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