Microsoft Craters on the Surface

Microsoft’s recent wave of promotions and deep discounts for its Surface RT tablet, the company’s first big push into hardware, led to speculation that it was close to releasing a new version. Turns out the reason was even simpler: Nobody’s buying the thing.

In its exceptionally bleak earnings report yesterday, Microsoft took a stunning $900 million writedown on inventory for the Surface RT, which launched in October, starting at $500 ($600 for double the storage capacity). On Sunday, the company knocked $150 off both models; Mark Hachman’s back-of-the-envelope math ballparks the unsold inventory at 6 million tablets, compared with maybe 1.8 million sold. This is after a June promotion that offered the device to schools and universities for as much as 60 percent off.