One of the world’s largest technology companies experienced a share ‘sell off’ on the last Friday of trading. Microsoft stock dropped by more than 11 percent as investors in the tech giant sold en masse as demand for operating systems and the company’s latest tablet waned.
After investing $900 million in Surface RT – a brand new tablet designed to compete with Apple’s incredibly successful iPad – Microsoft struggled with poor sales and an increasingly competitive marketplace. The tablet, according to reports, failed to sell at even a fraction of analysts’ estimates, hurting Microsoft’s finances dearly.
The tablet, which was originally priced at $499 in an effort to attract high-end tablet customers away from Apple’s iPad, has been slashed to just $349. The tablet offers a large range of attachable devices, including a wireless keyboard – a feature that was one of several Microsoft was betting on for commercial appeal.
The price drop aims to make the tablet an affordable alternative to iPad that can run Microsoft Office and other full-featured applications. Technology commentators are sceptical of its success, even at the lower price point, claiming that Microsoft missed the mobile train as it was leaving the station.
Microsoft stock dropped to $31.40 by the end of Friday, down from $35.44 in earlier trading. The decline in value is the largest in single day trading since Microsoft lost a large portion of its value during the dot-com bubble in 2000. The company’s income, however, was relatively solid, with a $4.96 billion total quarterly income.
Other issues facing Microsoft include a 6 percent decrease in sales of Windows in the last twelve months. Technology industry analysts believe that Microsoft could face diminishing sales of its home operating systems as PC sales decline, despite its significant enterprise operating system sales chain.
