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Microsoft's Red Ring warranty conference call transcribed
>> From joystiq.com:
[QUOTE]
Following yesterday's announcement that Microsoft would be expanding their warranty program to cover the Red Ring of Death issue for up to three years from the purchase date -- at a cost of $1.05 to $1.15 billion -- we tuned into their conference call with Robbie Bach, President of Entertainment & Devices Division, and other Microsoft executives.
* David Hilal (Friedman Billings Ramsey): A question on how many units have been affected out of the 11.6 million and is there a problem that's completely behind it?
* Robbie Bach: Yeah, so we're not going to discuss, nor have we historically discussed, return rates or specific numbers of units. Suffice it to say that with a billion dollar charge and the focus we're putting on this that it's a meaningful number. It's one that we take very seriously and one that clearly has our attention. In terms of going forward, we do feel like we understand the issues and have made the changes needed to dramatically reduce this problem going forward and that we think we have our hands around it at the engineering level, which is the important thing for us clearly to do. And in fact, as Chris inferred, if you look at our fiscal year '08 expectations those are on track with what we said in the past and that's because we feel comfortable with where we are on the engineering side.
* Alan Cook (Merrill Lynch): This product's been out for a little over 18 months. Can you tell us when the problem became apparent? Is it something that's just cropped up over the past few months? Or has it been around for the full 18 months?
* Robbie Bach: Well, for a little over the first year, this problem - this set of issues - wasn't visible at all. It's the type of problem that doesn't happen because you turn on the 360. Sometimes you have hardware problems the first time you turn something on and you have a problem right away. These aren't those types of problems. So for the first year-plus it was something that wasn't, frankly, really on our radar screen. But in the last couple of months, we started to see significant increases in repair requests, significant call volume, and significant attention from people. And so we geared up to respond to that appropriately. It is one of those challenges in terms of figuring how you can test for things that happen a year to 18 months into the life cycle of a product; it's the type of testing that we do today and we're gonna do obviously more of that going forward.
* Charlie Debona (Sanford Bernstein): I was wondering if you could comment on whether this was a design issue or an assembly issue. And to the extent it's an assembly issue, do you have any recourse to your manufacturers?
* Robbie Bach: You should think of this as an issue that's Microsoft's responsibility. The partners who have done assembly and component work for us have done good work; we're very proud of working with them; we're going to continue to work with them. So you should think of it as a Microsoft design issue. Again, since it's multiple things, I hate to even point at design. To get at the heart of your question, it's really our responsibility, not anybody else's.
* Charlie: And so is this something that you've now been able to engineer?
* Robbie: Yes.
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Full Story: joystiq.com
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