Is This Good News for Microsoft Surface 2?
Microsoft has announced that it's starting to run out of pre-order inventory for its freshly announced Surface 2. Before investors get too excited, they should remember that the exact same thing happened with the first-generation Surface RT a year ago, which still culminated in a $900 million inventory writedown last quarter.
However, Microsoft had reportedly ordered between 3 million and 5 million units at the time, and outgoing CEO Steve Ballmer has since admitted that the company built too many. If Microsoft's build plans are more balanced with demand, it could avoid future possible charges. The new models are also priced slightly lower at $450, which should reduce their initial carrying value on the balance sheet.
In this segment of Tech Teardown, Erin Kennedy discusses Microsoft's Surface 2 pre-orders with Jamal Carnette and Evan Niu, CFA.
Get great growth
Tired of watching your stocks creep up year after year at a glacial pace? Motley Fool co-founder David Gardner, founder of the No. 1 growth stock newsletter in the world, has developed a unique strategy for uncovering truly wealth-changing stock picks. And he wants to share it, along with a few of his favorite growth stock superstars, WITH YOU! It's a special 100% FREE report called "6 Picks for Ultimate Growth." So stop settling for index-hugging gains... and click HERE for instant access to a whole new game plan of stock picks to help power your portfolio.
The article Is This Good News for Microsoft Surface 2? originally appeared on Fool.com.Erin Kennedy, Evan Niu, CFA, and Jamal Carnette have no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.