Report claims Microsoft still losing lots of money on Surface tablets

A new report claims that Microsoft continues to lose money on its Surface tablets, even as the company claims that sales of its new Surface Pro 3 are "outpacing" earlier models.

Microsoft revealed in a recent 8-K statement filed with the U.S. Securities and Exchange Commission that for the quarter that ended on June 30 it took in $409 million in revenue from its Surface tablets. However, the company declined to offer any information on its Surface costs, as it has in previous quarters. Computerworld claims, via their own financial computations, that the cost of Surface products at Microsoft was $772 million for the quarter. If that is accurate, the Surface division lost $363 million.

Microsoft did admit in its SEC filing that the Surface division did take a one-time charge, due to the cancellation of a "new form factor". That's likely a reference to the Surface mini, the seven inch tablet that was in heavy development until Microsoft decided not to sell the product just a few weeks before it was due to be announced.

Computerworld claims that Microsoft may have lost as much as $1.7 billion on Surface development so far. That includes the $900 million write down that the company admitted it took in 2013 due to low sales of the first Surface RT tablets. Do you think Microsoft should continue to make Surface tablets even as its losses mount?

Source: Computerworld

John Callaham