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July 19, 2013

Comments

$900 million is just the accounting charge related to lowering price of RT tablets in inventory from $500 to $350. The math works out to 6 million RT tablets.

Saying that something is a flop because they lower the price is fine. But saying that it's only a flop in the amount that the price has come down seems to underestimate the issue. What if they never sell those RT tablets despite lowering the price by 30%?

I don't know how long tablet useful lives are, but October 2012 was many months away, so it's probably time for potential buyers to wait for Surface 2.

Therefore we could assume that the full 6 million tablet inventory is a flop, in which case it was a $500 per tablet x 6 million tablets = $3 billion flop.

Side note, do you know why they call it the Surface? Because it's a great surface to put your ipad on.

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