Microsoft's fourth-quarter earnings report this week included a whopping $900 million write-down for what it called "inventory adjustments" for the Surface RT tablet computer. The charge, which lopped 7 cents per share off Microsoft's earnings, is the clearest evidence so far that the company's Surface RT has been a bust.
In recent weeks Microsoft has taken steps to reduce its inventory of unsold Surface RT tablets, including cutting the price by $150, selling them to channel partners at heavily discounted prices at the Worldwide Partner Conference, and even giving them to teachers for free.
Until recently, Microsoft had been selling Surface tablets only through its own retail and online stores and through Best Buy, Staples and Walmart. Last month Microsoft granted the privilege of selling Surface to 10 large account resellers. But it hasn't said when it will begin selling them through its broader channel, a move that has upset the company's legion of channel partners.