Microsoft is losing money on the Surface; has only sold 1.7 million tablets

July 31, 2013

Microsoft recently filed with its Form 10-K report with the Securities and Exchanges Commission, and the paper makes for stark reading concerning the firm’s tablet ambitions.

The form details that Microsoft made just $853 million in Surface tablet revenues in the eight months from launch to June 30, with this accounting for less than 5% of Microsoft’s Windows division revenues ($19.2 billion) earned in fiscal 2013.

On its own, this figure wouldn’t be so bad if it wasn’t for the fact that the SEC filing also details that Microsoft’s sales and marketing expenses increased $1.4 billion, or 10%, because of the big ad campaigns for both Surface and Windows 8.

Microsoft hasn’t publicly announced how many Surface tablets it has sold, although Geekwirereports that this latest revenue figure probably equates to around 1.7 million units.

This is a pretty sound estimate considering IDC forecast that Microsoft sold 900,000 Surface tabletsin Q1 and that a previous Bloomberg report revealed that the firm had sold 1.5 million tablets up until May.

July hasn’t been a good month for Microsoft when it comes to tablets. The firm was forced to write-down $900 million on an “inventory adjustment” of unsold Surface RT tablets earlier this month, and has since discounted all models by $150.


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