After the publication of financial results, Steve Ballmer recently held a private meeting with shareholders and employees in Redmond campus. During the session, Ballmer stated that Windows was not selling well, and this news didn’t come as a surprise.

Among the many topics discussed during the meeting, He admitted that Surface was a flop and said, “We built a few more devices than we could sell.” However, the company will not abandon the Surface as it seems well established. The recent price cut from $499 to $349 was necessary to reduce losses, even if it is negative to profits.


A year ago, Microsoft stepped in the tablet market with the Surface RT and Surface Pro tablets, and the company had huge expectations from their devices taking into account the large Windows user base that already exists. But the results weren’t exactly what the company was expecting for; these Windows 8 tablets couldn’t reach the targeted sales by large differences.

In order to get back on track, Microsoft plans to invest in professional services in the next fiscal quarter, and may want to get back into the tablet market with Surface 2 devices. There have been rumors that the next-gen Surface devices are currently under testing and will feature a number of improvements over the current generation. The most important upgrade will be related to specs, but you can expect much more from the company now. It is expected that the next-gen Surface RT tablet will arrive in early 2014 and will be powered by Qualcomm Snapdragon 800 chipsets, while the Surface Pro will run on the recently announced next-gen Intel Haswell chipsets. Both tablets will be 4G enabled in order to provide the fastest Internet connection. However, Ballmer didn’t speak about Surface 2.

The company has also accepted the fact that the quality of apps available on Windows Store is much more important than the quantity. Explaining the facts, Microsoft said that it’s more important to get Instagram onto the Windows platform rather than adding 900,000 new apps that consumers might not be interested-in. Things aren’t as simple as they look because Facebook already knows this fact about Instagram, but have not come up yet with an app for Windows platform.

In the tablet segment, the company already has to battle it out against a number of tough competitors like Apple and Samsung. There are already number of companies manufacturing quality tablets in the same price range, and most importantly using an operating system that works very well with touchscreens. It doesn’t mean that Microsoft’s Windows 8 is not the right OS for their tablets, but something’s still wrong, and Microsoft has to figure it out in order to get its business back.