{"efta_number": "EFTA02572388", "page_count": 19, "url": "https://epstein-data.com/EFTA02572388", "pdf_url": "https://epstein-data.com/pdf/EFTA02572388.pdf", "pages": [{"efta_number": "EFTA02572388", "page_number": 0, "text_content": "From: \nSteven Sinofsky \nSent: \nThursday, July 18, 2013 9:37 PM \nTo: \nJeffrey Epstein \nSubject: \nFW: Surface sales physics after a week \nMS wrote off 900M on inventory...this is a mail thread from November saying this will happen. Kevin Turner is the COO. \nEven better--at the last minute this 900M was an increase over the \"planned\" write off. Classic \"well it is bad news so \nlet's bank some of it\".... \nFrom: Steven Sinofsky \nSent: Monday, November 5, 2012 10:54 PM \nTo: Kevin Turner; Steve Ballmer \nSubject: RE: Surface sales physics after a week \nBut this is for January. Kevin previously indicated this was already the plan and given that we want to do a good job in \nJanuary and there is only a little bit of more work time relative to 12/1 it seems like we are on a path not to have time to \ndo what is viewed as a good job in January either. \nSo I was just going along with what he said was the plan for O1. I didn't even know about that was a plan as I had \npreviously indicated--I just held them back from everything while we talked about doing something near term. Their \nview was to roll in the near term with the longer term as you saw in the deck. \nAre you saying now that there was not a plan for Ca? \nSent from Windows Mail \nFrom: Steve Ballmer \nSent: November 5, 2012 10:49 PM \nTo: Steven Sinofsky, Kevin Turner \nSubject: RE: Surface sales physics after a week \nEFTA_R1_01741984 \nEFTA02572388\n", "char_count": 1410}, {"efta_number": "EFTA02572388", "page_number": 1, "text_content": "They cannot do meetings until the plan is approved by me. Please let them know Steven. If I read the deck correctly they \nwant to offer 2.3 year exclusives \nSent from my Windows Phone \nFrom: Steven Sinofsky \nSent: 11/6/2012 8:17 AM \nTo: Steve Balime \nSubject: RE: Surface sales physics after a week \nKevin Turner < \nThe group you say below has all been working -- that's the deck they have (which is the suning model). \nIf you want to meet with them then by all means please do -- set up a call or anything. The deck I sent you is the deck \nthey would use except for the near term part of course. They will focus first on Europe and Oz. \nThey understand that they are going to meet with folks in order to land January. The timeline for this is equally tight \nsince not much can happen in terms of planning in December (which is partially why they remained optimistic about \nlanding for 12/1). \nThey are likely booking trips and ready to go is my guess. \nSent from Windows Mail \nFrom: Kevin Turner \nSent: November 5, 2012 6:31 PM \nTo: Steven Sinofsky, Steve Ballmer \nSubject: RE: Surface sales physics after a week \nFrom my side, I remain uncomfortable with Dec 1 jam in outside China. But I am supportive of the unblock for a \ncalendar Q1 approach to mass retail. I would pursue more distribution in China now and we must ensure Sunning is in \nthe loop. \nNick would need to begin the work now on the oem talk track which we would all need to go through and role play. \nChris, Stephen S., Jeremy, and Daryl would need to work with Vince on the retailer GTM and I can put cycles on this with \nthem next week. As a reminder, this week in retail is slammed with Halo 4 launch. \n2 \nEFTA_R1_01741985 \nEFTA02572389\n", "char_count": 1708}, {"efta_number": "EFTA02572388", "page_number": 2, "text_content": "I also believe we should do the remaining points i outlined below as well... \nJust let me know how you want to proceed as I am in Saudi Arabia today but will do my best on mail. \nKt \nSent from my Windows Phone \nFrom: Steven Sinofsky \nSent: 11/6/2012 1:16 AM \nTo: Steve Ballmer; Kevin Turner \nSubject: RE: Surface sales physics after a week \nJeremy Dale and Alan Bowman in CCG, along with Tami and I if this is about retail execution. Just Tami and I if this is \nabout OEM relationships. \nFrom: Steve Ballmer \nSent: Monday, November 5, 2012 2:10 PM \nTo: Kevin Turner; Steven Sinofsky \nSubject: RE: Surface sales physics after a week \nWho should i put with questions about how this work.s kt, Chriscap, steveschueler or. Their repoerts \nSent from Windows Mail \nFrom: Steven Sinofsky \nSent: November 5, 2012 2:05 PM \nTo: Steve Ballmer, Kevin Turner \nSubject: RE: Surface sales physics after a week \nThe ppt is customized by retailer with the regional account managers in ccg. \nThe folks who work for Chris are there for delivery and were part of making the decks. They were ready for this. This \nisn't the Surface team flying solo. \n3 \nEFTA_R1_01741986 \nEFTA02572390\n", "char_count": 1164}, {"efta_number": "EFTA02572388", "page_number": 3, "text_content": "I don't see why the oem relationship is more challenging now than janaury. I get the emotion but that is already there. \nAs a practical matter it isn't a legitimate concern and doesn't change in January. \nIf we want to sell units this year they need to start now...using the 3week timeline we used for suning. That was in the \nfirst mail. \nOtherwise they need to start now for a more elaborate plan for January. \nBut if we don't sell units this year we have to stop the line. \nThis is really just math. \nFrom: Steve Ballmer \nSent: 11/5/2012 2:01 PM \nTo: Kevin Turner; Steven Sinofsky \nSubject: RE: Surface sales physics after a week \nThe handling with the retailers and oem's is challenging. what time commitment from Chris, you Steven, kt, and me is \nrequired and when. This will take selling is there a proposal or was the ppt for china alne \nSent from Windows Mail \nFrom: Steven Sinofsky \nSent: November 5, 2012 1:56 PM \nTo: Steve Ballmer, Kevin Turner \nSubject: RE: Surface sales physics after a week \nWhat do you want to do? Just tell me how to unblock. \nI just went through the math again and the cost of shutting down production is off the scale. And the ability to sell thru \nwhat we are making just can't happen if we don't act now. There's a really big financial issue. Even opening the door \nnow doesn't escape the sell thru math but gives us a shot. \nlets get folks talking today. We did suning from nothing to a unit run rate equivalent to the us stores in 3 week. We can \ndo something in EC and Oz at least. \nFrom: Steve Ballmer \nSent: 11/5/2012 1:50 PM \nTo: Steven Sinofsky; Kevin Turner \nSubject: RE: Surface sales physics after a week \n4 \nEFTA_R1_01741987 \nEFTA02572391\n", "char_count": 1687}, {"efta_number": "EFTA02572388", "page_number": 4, "text_content": "Does this propose these retailers are exclusive for 2-3 years. Who will make the calls on the partners. Both questions \nare valid whenever we proceed \nFrom: Steven Sinofsky \nSent: Sunday, November 4, 2012 10:42 PM \nTo: Kevin Turner; Steve Ballmer \nSubject: RE: Surface sales physics after a week \nLet's take a step back. The intent was not to surprise, but to act on where we are. I think we're all surprised. I'm \nsurprised at where we are in volumes, and honestly I don't think anyone feels we have \"plans\" to broaden distribution in \nJanuary. So let's just assume we all have a bit of surprise and see what we can do to manage what I think is a drastic \nsituation we find ourselves. There's nothing intended other than to get us to a better spot and certainly this is not about \nthe efforts going on everywhere to amplify what is going on in our own stores—we've all spent considerable energy \npersonally and the efforts of those working in the stores are historic. \nWe can disagree on how Surface will be labeled. Here's the data I am working with. Wall Street analysts have come up \nwith estimates as low as 1 million units and on average in 3.5 million units for 2012. These are not made up. It is clear \nthese are based on sourcing from component providers (likely nvidia but others as well). In other words, it will be pure \n\"spin\" to say we are hitting our own targets because in fact we have made about 1.2-1.5 million units this year (the 1.2 \nnumber is based on delivery before holiday, so add one more week of production). In addition, we are up against the \nconfusion that got put in place over whether we are committed to Surface or it is a boutique product designed to \"push \nOEMs\". Since we will certainly not announce a number, it is likely everyone will conclude whatever we did (and \nwhatever we say) are not meeting even our own expectations. We will be in a spiral very quickly. I've personally talked \nto several of the analysts who write the reports you send around and I am c\n... [truncated, 3764 chars — for the full page use /api/corpus/document/EFTA02572388/4 or ?id=EFTA02572388&page=4]", "char_count": 3764}, {"efta_number": "EFTA02572388", "page_number": 5, "text_content": "increase our total units. It means our online units need to go up by about 8x. It does not seem like that has any chance \nof happening. \nThe actions proposed are all excellent. I don't think one could disagree with them. But math says it won't be enough: \n1. \nTake Surface NOW to other retailers in China. Gome, Mall Stores, etc. {Suning has a much larger footprint \nalready so this won't double the runrate} \n2. \nExtend our Holiday stores NOW for next calendar year. {The math on this will be positive, but this all is next \ncalendar year and will not change the velocity we are seeing so this doesn't add to the unit runrate} \n3. \nStart on a plan now to properly take Surface to mass retail in Jan/Feb with the Pro launch,. (We agree we have \nto plan now. I am suggesting that as we plan this we will find an appetite and capability to do more sooner} \n4. \nStrategize how we tell our OEM's on our plan to take Surface to mass Retail, then we must properly tell the \nOEM's. {We have to do this no matter what if we follow your recommendation 3.} \n5. \nAccelerate our physical Stores in the US and open physical and pop up stores in the Canada, UK, Australia and \nChina in 2013. (This is a small marginal increase in volume} \nWe're missing what we would do in Europe, Asia, Pacific. Online and experience centers are not working to move units. \nWith the fulfillment challenges we have had it is not clear we can recover from that—there's a good chance we have a \nsignificant SAT issue that will remain for quite some time. \nYour issues raised are all real. Let me try to talk about them a bit in terms of the categories of issues: \n* \nOEMs. We are in a tough spot as we operationalize things internally in that when there are differing views one or \nmore folks hold up the possibility of upsetting OEMs. But we're not consistent in what we do or how we do things, so \nthis isn't really something we can model or operationalize. From the outset we've been in a tough spot. When we \npriced Surface at $4\n... [truncated, 3884 chars — for the full page use /api/corpus/document/EFTA02572388/5 or ?id=EFTA02572388&page=5]", "char_count": 3884}, {"efta_number": "EFTA02572388", "page_number": 6, "text_content": "We know the demand for coverless 64GB as well. Our margin structure is based on 110% attach. Less than that is \nproblematic. All of this was known in the move to $499 coverless. The retail model we have in place focuses on attach, \nbut is a risky margin proposition and stock out of colors can be a real issue. \n• \nEnterprise. I'm excited to open this up. It is tough to see this as a material impact to the overall model. \n• \nProduct quality. I think this is a red herring. We've seen nothing at all to indicate product quality issues. Even \ntwitter is silent on quality issues. The tone of product reviews started off positive and is increasing. The 8% number \ndoesn't match the data we have but even then is close to the modeled number at 6%. Regardless, I don't know what we \nwould do other than merchandising and scripts to change this since the product is what it is. \nSupply chain. I think we've worked this out and know how to scale. \n• \nUSA retail. I will defer. In many ways this is the least of our challenges given our footprint in the US. I have a hard \ntime thinking WMT would stock us effectively given the low priced tablets they sell currently. \nI'm not trying to be flip and not pay due to these issues. What I want to say is that all of them are being worked on. I \nthink we have three courses of action: \n• \nPlan starting now on how we expand for January. We can call this plan of record. I am not so sure it was. In any \nevent let's do that now. It still involves folks getting rolling now. So we need to get them going. \n• \nWith those dialogs happening we can see what we can execute in Europe, Aus now. This is where we have no \n\"see and buy\" presence and we can definitely get something going—at least folks think so. We should allow them to \nhave the dialog. \n• \nDecide on a US plan. This seems a separate choice given the footprint we have here. \nThere is a fourth action which is we essentially do nothing now. I don't think anyone is recommending that. \nArguably there is \n... [truncated, 3042 chars — for the full page use /api/corpus/document/EFTA02572388/6 or ?id=EFTA02572388&page=6]", "char_count": 3042}, {"efta_number": "EFTA02572388", "page_number": 7, "text_content": "based on what we hear we can decide to do more. Absent that, our only option is to reduce manufacturing. I don't see \nit as feasible to inventory 1M units. And then we'll see how we can manage Wall St expectations. \nRelated to this is the notion of \"Pro in January\". I think we should temper expectations. This product is a niche product. \nIt is $1000 and is not \"the best tablet and the best laptop\". It is a convertible with compromises. It runs x86 software \nbut it does so at a size, weight, and battery life that will not please when compared to the world of 7\" tablets. It is a \nsmall ultrabook (in 2 of 3 dimensions and weight). It is an ideal PC for a Windows 8 developer or for ruggedized \nindustrial uses. It is not the ideal student PC (battery life) or knowledge worker PC (battery life, weight). It is incredibly \nnice. But it is not a blockbuster. Our chips are on Surface RT. \nI know everything about Surface has been thoughtful. This is just as thoughtful. I've attached the retail deck. This is \nreal work that has been going on for months. The roadshow is what we present to retailers based on the Suning work. \nSlide 23 has the retailer margin. Slide 26 starts with the gives/gets. Slide 29 has the instore efforts on 12/1. Slide 39 is \nthe RSP strategy. \nThe GM looks like this: \nOpen \nMax \nSuning \n32gb Standalone \n0% \n0% \n0% \n32gb Bundle \n1% \n4% \n4% \n64gb Bundle* \n8 \nEFTA_R1_01741991 \nEFTA02572395\n", "char_count": 1421}, {"efta_number": "EFTA02572388", "page_number": 8, "text_content": "3%? \n6% ? \n6% \nCovers \n20% \n25% \n25% \nAccessories \n20% \n25% \n25% \nThe following outlines the negotiation scenario financially: \nFrom: Kevin Turner \nSent: Sunday, November 4, 2012 9:06 AM \nTo: Steven Sinofsky; Steve Ballmer \nSubject: RE: Surface sales physics after a week \nThis is a complete surprise to me.... I had always planned on us bringing Surface to mass retail in the first quarter of \n2013 and this is something that requires us to really carefully think through. \n9 \nEFTA_R1_01741992 \nEFTA02572396\n", "char_count": 509}, {"efta_number": "EFTA02572388", "page_number": 9, "text_content": "Explaining our Surface performance through the Holiday is very positive, simple and straightforward in my view.... It is \nalso the truth.... The gist of our message would be \"We are new into pc/tablet hardware business. We purposefully \nlimited our distribution to our own stores and on-line to learn about the product and how it would be received by \nconsumers and to allow us to refine our manufacturing, supply chain and logistics in preparation to bring it to mass retail \nin 2013. The response from consumers has been incredible, our stores have been over-run with customers wanting to \nlearn more about surface and the selling performance of the devices has exceeded our expectations. We are now in a \nposition to bring this wonderful product to everyone through our retail channel partners in the first quarter of 2013 as \nwe launch our Pro version.\" I think this is one of the easiest stories we have ever told. \nI philosophically disagree that Surface will be labeled a failure if we don't do mass retail distribution by December 1. I \nactually believe if we try and jam it in and it doesn't land well or perform well at mass retail then it will for sure be \nlabeled a failure. This is why I believe this requires a more thoughtful approach. Also post the Holiday allows the device \na better chance to stand on its on at Retail as the noise of competing devices and fixtures between now and the end of \nthe calendar year is and will be deafening \nSome business concerns I have in jamming this into Dec 1; \n1. \nOEM's would be incensed... Communication that we are doing this before Dec. 1 would be brutal, bloody and \nfurther damaging to our trust/relationship. There is no way to spin this as we would be taking money out of our OEM's \npocket directly in this holiday selling season. We simply can't do a quality job of this communication in this time frame \nand it will be viewed as very insincere given the timing. \n2. \nNo way to do a quality in store fixture, signage and get it made and \n... [truncated, 3937 chars — for the full page use /api/corpus/document/EFTA02572388/9 or ?id=EFTA02572388&page=9]", "char_count": 3937}, {"efta_number": "EFTA02572388", "page_number": 10, "text_content": "10. \nEverything about Surface has been thoughtful and deliberate and calculated and this goes against that in \nevery way shape and form and I don't get why would even consider this right now. \nMy recommendations; \n1. \nTake Surface NOW to other retailers in China. Gome, Mall Stores, etc. \n2. \nExtend our Holiday stores NOW for next calendar year. \n3. \nStart on a plan now to properly take Surface to mass retail in Jan/Feb with the Pro launch,. \n4. \nStrategize how we tell our OEM's on our plan to take Surface to mass Retail, then we must properly tell the OEM's. \n5. \nAccelerate our physical Stores in the US and open physical and pop up stores in the Canada, UK, Australia and China \nin 2013. \nFrom: Steven Sinofsky \nSent: Sunday, November 04, 2012 8:31 AM \nTo: Steve Ballmer \nCc: Kevin Turner \nSubject: RE: Surface sales physics after a week \nJeremy Dale has been involved but I don't know what he has communicated. We are trying to keep this low until we \ndecide given the sensitivities. \nVince Messina on our team is doing the primary driving as he did the Sunning deal in China. Since he does all the \nhardware assortment already, he worked closely with CCG who supported his lead. \n11 \nEFTA_R1_01741994 \nEFTA02572398\n", "char_count": 1225}, {"efta_number": "EFTA02572388", "page_number": 11, "text_content": "Sent from Windows Mail \nFrom: Steve Ballmer \nSent: November 4, 2012 7:43 AM \nTo: Steven Sinofsky \nCC: Kevin Turner \nSubject: RE: Surface sales physics after a week \nWe all agree we need to expand distribution How and when have not been discussed amongst the three of us is chris \ncap looped in \nFrom: Steven Sinofsky \nSent: Sunday, November 4, 2012 6:51 AM \nTo: Steve Ballmer \nCc: Kevin Turner \nSubject: RE: Surface sales physics after a week \nWhat do you want to learn? What other data can we provide? \nSurface is about to catastrophically fail in a very public way. We don't know how to explain selling 1/10th the number of \ndevices as the lowest end of the lowest expectation. Word will get out very soon. There is no long term without this. \nFrom: Steve Ballmer \nSent: 11/4/2012 6:35 AM \nTo: Steven Sinofsky \nCc: Kevin Turner \nSubject: RE: Surface sales physics after a week \nThis is a huge decision with ramifications on consumers, retailers and oem's \nOur OEM's would certainly be upset \ngiven their expectations The timing does not allow care \nI think we need a discussion with you KT, me, tami, and \nchriscap at min to walk through I do not want to make a mistake on this the downsize seems large compared to short \nterm upside What margin are we thinking for the retailers on the various sku's that was never really worked through \nto the best of my knowledge \nthanks for pushing \nI am in Europe all week It will be tough but perhaps we can do a phone call with all relevant parties. I cannot say yes \nbased on what I know I did call KT on Saturday afternoon and this plan was news to him too \n12 \nEFTA_R1_01741995 \nEFTA02572399\n", "char_count": 1638}, {"efta_number": "EFTA02572388", "page_number": 12, "text_content": "From: Steven Sinofsky \nSent: Saturday, November 3, 2012 3:17 PM \nTo: Steve Ballmer \nSubject: RE: Surface sales physics after a week \nDaryl, Vince, and Jeremy and their managers as far as I know. Tons of meetings this week. They are anxious to go. \nFrom: Steve Ballmer \nSent: Saturday, November 3, 2012 3:13 PM \nTo: Steven Sinofsky \nSubject: RE: Surface sales physics after a week \nWho on the retail team worked this up \nSent from my Windows Phone \nFrom: Steven Sinofsky \nSent: 11/3/2012 2:31 PM \nTo: Steve Ballmer \nSubject: Surface sales physics after a week \nWe're at a point where we have enough data about the velocity and potential velocity for Surface sales to need to make \na change. We're really in a very tough spot and I feel like we're on the verge of an unrecoverable situation. This is really \njust about the physics of how much we can sell through our store presence and online, and the number of units we have \nand will have. We are going to be sitting a very large inventory very soon and there's no real potential to have sales \nkeep up with inventory growth unless we stop manufacturing, and the implications of that are significant. This is \ndecidedly not a statement of our stores and popups. The traffic is crazy. We are holding steady in terms of traffic and at \nthe limits of sales execution per square foot given traffic, associates, and time with customers (all assuming traffic \nholds). Here is the San Fran store this morning at an opening: \nThe only major learning is that we're not selling the units through online that we expected—the physics were such that \nwe had to sell upwards of 70% of the units through online to make the overall sales match inventory/production and \nwe're not even close. While we've had significant problems with the merchandising and selling motion on the site (and \nfulfillment) and this is likely to taint sales at least in UK and Germany given the breadth or reporting of these issues. \n13 \nEFTA_R1_01741996 \nEFTA02572400\n", "char_count": 1981}, {"efta_number": "EFTA02572388", "page_number": 13, "text_content": "But the core learning and challenge is really that people want to touch Surface—does it type, how does it feel, etc.. \nEven when available, our experience centers are suffering from a low conversion rate because of frustration that you \ncan't give us money and receive a unit right then and there. So all we can do is look for ways to get the product into \npeople's hands when they can conduct a transaction and receive a PC right away. \nThe solution is to broaden our retail footprint as fast as possible outside the US, and to extend our retail presence in the \nUS. These are two different choices. Outside the US is much like China and that we just decide to work with partners or \nnot if we want to sell the PCs. Inside the US there are deeper implications. So these are separate choices. \nIn all cases, we have a plan we can execute on starting Monday that will have a footprint on 12/1 in store and expanding \nthe footprint from a merchandising perspective through the boxing day and sales selling season. It is obviously less than \na black Friday presence but it is too late for that. We know retailers are anxious and willing. \nMy suggestion is to rapidly move on this starting Monday—putting people on planes to make deals. There's not a lot of \ndata beyond the selling data that we can gather. It is about faith we can do something credible. We have structures to \nmaintain margin and pricing, accessory attach, and so on. We will not undermine the pricing and value proposition to \nland this. \nIf we don't want to do this right away then we are going to need to do something about production as we will reach an \ninventory level that cannot be sold through in 2013. I would recommend we stop production and reconsider GTX (which \nwe believe is likely to be low volume at this point). \nAfter reading this if you have any other ideas we should consider them now. We have literally spent the entire week \nlooking at velocity and I really don't see another path. \nFrom my view, this is conserv\n... [truncated, 2463 chars — for the full page use /api/corpus/document/EFTA02572388/13 or ?id=EFTA02572388&page=13]", "char_count": 2463}, {"efta_number": "EFTA02572388", "page_number": 14, "text_content": "exclusives to key retailers (list below). We will have walk away points for each retailer and will do so if we can't strike \nthe right deal in margin, placement, and volume (the deal would include a minimum commitment of volume that they \nown so we don't put a bunch of inventory out there we have to take returns on). We push to hold our margins as best \nas possible, yet still get assorted (much like the Suning deal we struck). \nBackground: \nThe feedback that people believe this is a great product and the desire to touch and feel our device is cool to see. There \nare many questions about whether the touch cover really works and for a device that people want to carry around with \nthem, understanding the feel of Surface in their hands is very important. Surface is also at a price point where most \ncustomers (with the exception of a small group of tech trendsetters) will want to be sure they want this product before \nthey purchase it. We are seeing that today in that all of our Stores are FULL daily with folks that want to see and play \nwith Surface before they purchase. And we're basically selling as fast as we can in the store without sacrificing the \nwhole store experience. \nChart- If we take our current per week sales numbers and assume an increase of 10% growth each week, we would sell \nabout 260K units between now and Jan 1. (These averages remove the peaks of preorder and launch date as well as \nBlack Friday, but have a consistent growth each week). That leaves an inventory of —1 M units (about $500M plus \naccessories). It is difficult to model the increase in online—there's a network effect of sorts so 10% a week as a linear \ngrowth is likely not the right model for online as there might be a steeper curve that kicks in later. \nPhysical Stores \nUS & Canada Online \nInternational Online \nTotal \n3-Nov \n13391 \n4606 \n868 \n18865 \n10-Nov \n14730 \n5067 \n15 \nEFTA_R1_01741998 \nEFTA02572402\n", "char_count": 1916}, {"efta_number": "EFTA02572388", "page_number": 15, "text_content": "955 \n20752 \n17-Nov \n16203 \n5573 \n1050 \n22827 \n24-Nov \n17823 \n6131 \n1155 \n25109 \n1-Dec \n19606 \n6744 \n1271 \n27620 \n8-Dec \n21566 \n7418 \n1398 \n30382 \n15-Dec \n23723 \n8160 \n1538 \n16 \nEFTA_R1_01741999 \nEFTA02572403\n", "char_count": 208}, {"efta_number": "EFTA02572388", "page_number": 16, "text_content": "33420 \n22-Dec \n26095 \n8976 \n1691 \n36763 \n29-Dec \n28705 \n9873 \n1861 \n40439 \nTotal (11/30-1/1) \n181,843 \n62,547 \n11,787 \n256,177 \nBased on our manufacturing rate against the current throughput from the stores and online, we believe we will have \nabout 1M units in inventory at the end of the calendar year. While we have opened commercial orders, these will likely \ntake some time before getting to significant volume and that model still must be proven out as we walk a delicate \nbalance with OEMs and manage through an enterprise sales cycle of evaluation, requirements, etc. \nThe approach is to go to EMEA retailers in the next week, this will enable us to get into stores by 12/1 and still affect the \nmajority of the holiday shopping season. In addition, a meeting with retailers now would help position us more \npositively when the RSPs are talking to consumers (obviously right now this is fairly ugly as the basic answer from an RSP \nis \"the product is so bad we don't even stock it\"). Optimistically, They can then tell customers to come back on 12/1 to \nbuy it, rather than it's not a good product. Over time as our reputation grows among broad consumers and more and \nmore have experience with Surface that they talk about, we hope online will also continue to pick up. \n17 \nEFTA_R1_01742000 \nEFTA02572404\n", "char_count": 1315}, {"efta_number": "EFTA02572388", "page_number": 17, "text_content": "For reference- Suning had an original sell in of 50K with a forecast submitted this week of 225K additional units over the \nnext 3 months (550 stores) as Chinese New Year is their largest selling season. If we go into Europe/Australia Brick and \nMortar, we believe we would sell in 200-400K across the four retailers (MSH, FNAC, Dixons, Harvey Norman) with \npossible upside through holiday. This also is a great time to capitalize on these retailers being excited and the \nmomentum we have in the channel. \nThe Approach: \n* \nEurope and Australia- Conceptually, here is how we think this can play out. We will engage in Europe and \nAustralia with a target to get assortment by 12/1. We believe this is possible and it will help move the needle before \nChristmas. This is an opportunity for us to tackle with assortment at MSH, FNAC, Harvey Norman, and Dixons (Each with \nan exclusive in their primary region of France, Germany, Australia, and UK). It would also increase the amount of \ncountries we are in immediately as they have retail presence are in over 18 Countries throughout EMEA. We are sure \nthat if we start the manufacturing of fixtures today (using a similar footprint we used for Suning), we can have them up \nand running by 12/1. We also know that we can move product from the DTV and China in time to support a launch in \neach of these retailers. Naturally, this is aggressive from a timing standpoint, so timing is critical we get started quickly. \nYou can see below, the investment is about $3.8m to make this happen. I am not worried about the cost as much as the \nneed to start executing. \n• \nJapan and Russia- Fairly simple. Engage now, and be ready for the 1/26 launch. This also coincides with the \nmedia buy timing we already have in place, so I think this one is reasonably straight forward. I would expect some \ncultural challenges with Japan retailers as well as some need to find a way to merchandise differently to account for \nPIPC. \n• \nUS and Canada- Start the conversat\n... [truncated, 3373 chars — for the full page use /api/corpus/document/EFTA02572388/17 or ?id=EFTA02572388&page=17]", "char_count": 3373}, {"efta_number": "EFTA02572388", "page_number": 18, "text_content": "Retailers and store counts: \nFNAC - 75 \nMSH - 350 \nDixons - 500 \nHarvey Norman - 170 \nIn-person retailer assortment discussions = wk of 11/4 \n19 \nEFTA_R1_01742002 \nEFTA02572406\n", "char_count": 177}]}