Now that Microsoft Admits they Over-produced Surface RT, Perhaps We can Talk about Why
Hubris. It presented itself in three ways:
Microsoft crashed the Surface RT on the shores of Apple pricing. They wanted to prove that people would spend the same amount of money for a Microsoft tablet as they would for an iPad. Every company to try this has failed miserably. Motorola Xoom started at $499, died a quick and ignominious death, and was never heard from again. HP Touch pad started at $499, and ended in a speedy fire-sale. The Blackberry Playbook Started at $499, then fire-sale, then dead. The Amazon Kindle Fire HD 8.9, price drop. Only hubris explains why Microsoft went after that price point.
The clearest differentiator between the Surface RT and the iPad is Office. It is not Windows, as the Surface does not actually run Windows, or take advantage of the Windows app ecosystem. No the selling point for the Surface is that it is just like an iPad, except it runs Office. They even throw it in for free. This just shows how profoundly Microsoft overestimates how many people actually want to run Office on anything other than a work machine. Microsoft is incapable of imagining a world where the devices people use by choice, do not run Office.
Despite its popularity among consumers and enterprise, Microsoft is convinced that the iPad is lacking key features that tablet users really want. Therefore, they gave their iPad competitor a kickstand, a keyboard, a USB port, and mouse support. These are all the things one would include if they want to gain geek points, and counter-program the iPad. The trouble is, even the geeks who claim to want these things, do not buy the products with these things in significant numbers. Geek bits do not have mass-market appeal.
From the beginning, Microsoft made a niche product without consideration to what people like to do with tablets. They ignored every bit of data they had about the success of the iPad, and decided that what people really wanted was something else.
Not long ago, Bill Gates was banging on about how iPad users were frustrated because of the lack of Office. That is the kind of delusional thinking that plagues Microsoft. iPad users are the most satisfied tablet users in the world. They have been for the entire time such metrics have been taken. iPad users are perfectly happy with a tablet that doesn't run Office, doesn't have a USB port, doesn't have a kickstand, and doesn't run Flash.
Microsoft chose to ignore what makes the iPad a success, and double-down on their old, failed tablet strategies that have never been successful in the consumer market. I am convinced that Microsoft still doesn't understand why they overbuilt the Surface RT. The don't understand why it didn't fly off the shelves. This leads me to believe that they will make the same mistakes with the Surface RT2. I believe it all goes back to hubris. And I don't believe that is going to change anytime soon.