touched upon Surface performance in its last financial earnings call, but the fact remains that the product is still not something that is successful for the company — although overall sales have been on the rise. But as this report over at Computerworld states, citing a Microsoft filing to the US Securities and Exchange Commission, the device is still causing a loss. The total revenue of the Surface division came in at $494 million for the quarter ending March 31. However, since total investments (building and marketing) in these products were to the tune of $539, Microsoft lost around $45 million in this business. However, Satya Nadella, the new Microsoft CEO made it clear at BUILD 2014 that the company would continue to invest in the tablet lineup, with focus on creating new models. Now admittedly, the January to March period is not the brightest in terms of sales, at least compared to the previous two quarters, another important point to note here is that Redmond is losing less money on Surface tablets, each quarter. Sings of improvements? You bet! Maybe this is something that can be further improved upon with the arrival of the Surface Mini?]]>
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The money lost is nothing to Microsoft. A new product line is just like a new business. It can be a couple years before you see profit. They have LTE devices that will be part of carrier packages, and they have a smaller tablet coming out soon. They just need to think long-term investment.
You’re right. Companies like Microsoft can afford to lose money and throw piles of money towards marketing efforts. As long as the tablets are of excellent quality, there’s no doubt they’ll make Microsoft money eventually.
Not a shock. The iPad is still the most dominant tablet out there and Microsoft has some catching up to do. Let’s just hope this isn’t a permanent money loss.
They’re really counting on the surface mini at this point. I’m sure they expected to lose money when entering a market dominated by the iPad. At this point though, they need to start making money or they’re better off cutting it.