Steeve Ballmer, Microsoft CEO, admitted that the company overproduced the Surface RT tablet. Tom Warren of The Verge quoted Ballmer as saying that the company "built a few more devices than [it] could sell".

This overproduction led to a recent price cut of US$150 per unit. The price cut for the Microsoft Surface RT was done so that the company would be able to compete better in the market.

"We reduced the price of Surface RT by $150 to $349 per device. As a result of this price change, as well as inventory adjustments for related parts and accessories, we recorded a $900 million charge to our income statement", said Microsoft CFO Amy Hood.

The US$900 million charge was recorded as "inventory adjustments". This cost Microsoft US$0.07 per share which missed expectations.

The price cut may not have been enough though. Microsoft tried to get rid of surplus inventory through giveaways as well as discounts.