Investors sue Microsoft over Surface tablet

　　A Microsoft shareholder has filed a class-action lawsuit against the company, accusing executives of misleading investors about how well the Surface RT tablets were selling.
　　The lawsuit, filed Monday in U.S. District Court for the District of Massachusetts by San Diego-based law firm Robbins Geller Rudman & Dowd, was on behalf of plaintiff Gail Fialkov and others who bought Microsoft stock between April 18 and July 18.
　　It alleges Microsoft and some of its officers, including CEO Steve Ballmer, former Chief Financial Officer Peter Klein, Chief Accounting Officer Frank Brod and former Windows marketing head Tami Reller, violated federal securities laws by issuing false and misleading statements regarding the financial performance of the Surface RT.
　　Microsoft declined to comment on the suit.
　　Among other allegations, the suit says Microsoft had already amassed a large excess of Surface RT inventory by March 31, the end of its fiscal third quarter, but had not told investors about it.
　　This violated generally accepted accounting principles and Securities and Exchange Commission rules and regulations, the lawsuit claims.
　　“What Defendants knew, but failed to disclose to investors ... was that Microsoft’s foray into the tablet market was an unmitigated disaster, which left it with a large accumulation of excess, overvalued Surface RT inventory,” the lawsuit says.
　　Then, on July 18, Microsoft announced it was taking a $900 million writedown for Surface RT inventory adjustments in its fiscal fourth quarter, ended June 30. That “inventory adjustment” related to a $150 price cut for the Surface RT that Microsoft had announced just days earlier.
　　But “in truth ... the value of such inventory was materially impaired by March 31, 2013,” the lawsuit says.
　　That July news caused Microsoft stock to plunge 11.4 percent, down $4.04 to $31.40, erasing about $34 billion of the company’s market value, the lawsuit says.
　　Microsoft shares closed Tuesday at $32.23, down 1.3 percent.
　　The lawsuit also cites several incidents where Microsoft executives, between April 18 and July 18, had touted customers’ high satisfaction rates with the Surface, the tablet’s momentum in China, and the Surface’s contribution to Windows division revenue.
　　Those and other statements, the lawsuit alleges, misrepresented or failed to disclose “poor customer demand and lackluster sales.”
　　Microsoft has never disclosed how many Surface tablets -— both the Surface RT and the more expensive and powerful Surface Pro — it has sold.
　　In a document filed in July with the SEC, Microsoft said it made $853 million in the sales of its Surface tablets in the past fiscal year — not even as much as it had to write down.
　　Sean O’Connor, a University of Washington law professor, said it wasn’t surprising that a suit was filed.
　　“One truism is that when you have a big stock drop in a publicly traded company, the company gets sued,” he said.
　　And the law firm filing the suit — Robbins Geller Rudman & Dowd — has brought similar suits against Kohl’s, Lululemon and Medtronic, among others.
　　In terms of the merits of the case, O’Connor said he wasn’t convinced that, under generally accepted accounting principles, Microsoft would have been required to write down the inventory adjustment in the third quarter “if they reasonably believed that they could still move those units in the next six months or so.”
　　What he found more concerning, he said, were the executives’ statements about the momentum of Surface.
　　“Based on those kinds of very positive statements, people could say they bought stock because they thought things were going swimmingly well,” when, in actuality, Microsoft executives may have known things weren’t going well, O’Connor said.
　　“That could be a problem for Microsoft.”

Users might be able to boot straight

　　Whilst it appears like Microsoft is placing the finishing touches on Windows 8.1, a couple of reports say the release date continues to be a couple months away.
　　Both ZDNet as well as the Verge claim that Windows eight.1 will launch in October, not just for existing Windows eight PCs, but for new computers operating the updated operating method. The duo were the very first to report on Windows 8.1's (then named Windows Blue) existence, many months ago.
　　Thoughts you, this isn't a delay, as Microsoft has never ever confirmed a release date for Windows eight.1. The enterprise has only said that it would release the software to Computer makers (a procedure recognized as RTM) in August. Each reports say Microsoft is still on track.
　　But as ZDNet's Mary Jo Foley explains, Microsoft may possibly be holding back the actual launch for a couple of reasons: Initially, Windows eight.1 is reportedly rather buggy, even for a test build, so the further time will allow Microsoft to clean issues up by way of software program updates for new Pc purchasers. Second, releasing each the update and new Windows 8.1 devices at the same time may well make a bigger splash, amounting to a “launch event” for the extra user-friendly version of Microsoft's operating technique.
　　Windows eight.1 involves several concessions for desktop users, as well as new attributes for the modern interface. Users might be able to boot straight for the desktop, disable modern-style “hot corners” and access essential desktop functions by right-clicking around the newly-restored Get started button. The modern interface consists of big improvements to built-in apps, the capability to use three apps side-by-side, overhauled Bing search and more. The net impact is the fact that it is a lot easier to remain around the desktop if you would like, but not unthinkable to switch towards the contemporary UI.
　　If Microsoft manages to launch the update in October, it'll fall around the one-year anniversary of Windows eight. That's a big alter for Windows, which normally releases important updates as soon as every couple of years, but it's a necessary transform as Microsoft tries to maintain up with Apple and Google. Regardless of whether you really like or hate the operating method, there is no doubt that Microsoft's switch to a rapid release cycle is surely bearing fruit.
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