5. Summer Gadget Giveaways
It's like Robert Burns once said,
The best laid schemes of mice, men, Steve Ballmer and desperate Canadians often go astray.
Fine. The great poet did not use those exact words some two hundred years ago to sum up today's tech market. Nevertheless, the Scot certainly nailed the sentiment considering the device markdowns on display this week.
(MSFT - Get Report)
slashed prices on its Surface RT tablet on its Web site Monday to $349 from $499, with the version that includes the keyboard dropping to $449 from $599. Meanwhile,
chopped the price of
(BBRY - Get Report)
Z10 smartphone to $49.99 with a service contract. The Z10 originally went on sale in the U.S. in March at $199.99, putting it right on par with
All-in Mister Softee sold 900,000 of the devices in the first quarter of 2013, according to a May report from IT research firm IDC. That compared to 19.5 million Apple iPads and 8.8 million tablets from Samsung. Second-quarter tablet numbers have not been released yet, although the recent price cut offers a pretty clear indication that sales have not picked-up over the past three months. Same goes for the Z10 which came in almost 1 million units short of analysts' estimates last week and caused Blackberry's stock to lose a quarter of its value last month.
Or, to use our own, far less poetic, words:
Devices for sale! Devices for sale! Get your cut-rate, giant-killing gadgets here! We got BlackBerry Z10's, Microsoft Surfaces, you name it! If it was designed to slay Samsung or take a bite out of Apple, then have we got a deal for you!
"BlackBerry is still in the early phases of our transition," said Blackberry CEO Thorsten Heins at the company's annual meeting last week. "This isn't just the launch of a new product but a whole new platform. While many will judge us on the basis of one quarter of a single product, we are not a devices-only product."
We agree Thorsten. You are not a "devices" company. Now that the Z10 is headed to the discount bin, you are a single device company. Talk all you want about your network, but all you have left is the Q10 and that's not looking too steady these days.
As for our old buddy Ballmer, well, he's hoping last week's reorganization will revitalize his device business. Steve shifted his troops around so they would work together, as opposed to competing against one another.
And optimism over Microsoft's realignment may be the reason why shares of the lumbering tech giant hit a record high this week before selling off in the wake of its dismal second quarter results Thursday. Mister Softee said it earned 59 cents vs. the Street's estimate of 75 cents, including a $900 million charge, or a 7 cents per share impact, related to Surface inventory adjustments.
Then again, Microsoft bulls betting that Ballmer's latest scheme is the first step to his own exit best be prepared to be disappointed.
A bit of our own verse with all due apologies to Burns:
While his best laid schemes may go astray, Steve Ballmer will never, ever go away.