Surprise! Microsoft Loses Money Every Time It Sells a Surface

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.


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.