Surprise! Microsoft Loses Money Every Time It Sells a Surface

| Editorial

Sell a widget, lose a buck. That's what they teach in business school, right? If so, Microsoft must be earning an A++, because the company is losing money every time it sells a Surface tablet.

Trainwreck

The Surface Trainwreck

In quarterly filings with the SEC, Microsoft reported that it had a whopping US$893 million in revenue from selling an unspecified number of Surfii (no more than a couple of million units), and that doing so only cost the company $932 million.

That left Microsoft $39 million the poorer for all that work, but to be fair it's an improvement over Surface results from earlier this year, when Microsoft had to write down $900 million on the Surface. Heck, a $861 million improvement might even be cause to celebrate when it comes to this dog.

While I'm rubbing salt in the wounds of my own long-standing criticism of Microsoft's Surface strategy, allow me to point out that our own John Martellaro specifically predicted that Microsoft's Surface strategy would flop with holiday shoppers. He was, in a word, right.

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Comments

jfh17

How could M$ be losing money with the Turdface? According to the mangey teacher in one if their lame commercials: “all my students have one.”

Wayne Sander

Based on all their Zune and Windows Phone profits, they can afford a few gaffs now and then.

Aunty Troll

Microsoft making a loss on each and every Surface sold is bad for the consumer how exactly? Far better that then to pay 40% over the odds for an iPad - something which is great for Apple and it’s investors - not so great for Apple customers in the know.

JFH17, using “Turdface” automatically negates any opinion you might have, and Wayne, let’s not forget that the Apple Mac line is an abject failure too (30 years in the market, less than 10% market share), as is AppleTV.

Wayne Sander

Aunty, you assume that I was being facetious.  The Zune got almost 5% market share and the Windows Phone is quickly approaching that same milestone.  Microsoft is rolling in the cash from these product lines.

Aunty Troll

To be fair Wayne, I did, and I apologise for that - your reply is refreshing because normally misunderstandings are leapt upon with great glee - much obliged.

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