Microsoft's Surface RT sells out at Walmart—then doesn't
Following a significant price cut, Microsoft’s Surface RT sold out at Walmart.com on Monday. Or did it?
At about noon on Monday, an online order page for the Microsoft Surface RT tablet (with 32GB of memory) showed that the tablet was sold out online, but available through some local stores. But by Monday afternoon, and after PCWorld contacted Walmart for comment, the site had updated its page to show that the Surface RT tablet was once again available.
However, the Surface RT 32GB won't ship until August 6, Walmart.com’s online ordering page reported.
If the Surface RT was indeed sold out, one might call it a coup for Microsoft. Microsoft recently cut the price of the base Surface RT model by 30 percent, to $349. The 64GB Surface RT was also discounted by $150, and now sells for $449, or 25 percent off its former price. Typically, a price cut stimulates demand, a virtual necessity for the troubled Surface RT tablet.
Microsoft recently wrote down the value of its Surface RT inventory by $900 million, the financial consequence of its recent price cuts. Nevertheless, the move shipped with some undeniable PR baggage, as Microsoft couldn’t help but flag the tablet as a product that is headed for the lifeboats.
Analyst firm IDC estimated that Microsoft sold 900,000 Surface RT tablets during the fourth quarter of 2012, and shipped 900,000 Surface (RT and Pro) tablets during the first quarter. If Microsoft sold a comparable amount during the just-completed second quarter, that still leaves quite a few unsold.
According to that math, as many as 6 million Surface RT tablets are sitting idle. (As others have noted, that number was calcuated by dividing the total writedown by the $150 discount.)
“[W]e believe this pricing adjustment will accelerate Surface RT adoption and position us better for long-term success,” Amy Hood, Microsoft’s new chief financial officer, told analysts during the company’s recent fiscal fourth-quarter conference call. Selling out of the Surface RT would validate that claim.
For now, however, that doesn’t seem to be the case. PCWorld contacted Walmart to comment, but representatives did not return calls by press time. Walmart’s online site also reported that Surface RT (32GB) tablets were available today at the Dixon store near Sacramento, as well as a store in Richmond, Calif., outside San Francisco. However, the tablet was unavailable in Walmart’s San Francisco stores.
Microsoft has also struck a partnership with Best Buy, adding stores-within-a-store to 500 selected locations within the United States, plus another 100 more within Future Shop and Best Buy locations in Canada.
Not surprisingly, the Surface RT (32GB) is currently available to pick up in a number of Best Buy stores around the Bay Area, and online as well. Microsoft’s online store was not reporting any delays, either.
The question, of course, is how many Surface RT tablets Walmart had in stock, and how quickly the company could restock if it did sell out. If nothing else, however, for a brief time Microsoft’s Surface RT tablet had the allure of exclusivity about it—something it hasn’t had in some time.