SEC filing reveals Microsoft loses money on each Microsoft Surface tablet sold

Discussion in 'Surface Forum Site News' started by dgstorm, Apr 30, 2014.

  1. dgstorm

    dgstorm Editor in Chief Staff Member

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    Last week, Microsoft reported its Q1 earnings, and filed the appropriate papers with the SEC. A look at the documents revealed that the Microsoft Surface has yet to sell in the volume necessary for the tablet to produce profits for the Redmond based software giant. In other words, each Surface sale is dripping more red ink on Microsoft's balance sheet.

    For the three months ended March 31st, Microsoft lost $45 million on $494 million in Surface sales. For the nine month period ending in March, the red ink totaled $300 million on revenue of $1.8 billion. The cost of generating the Surface sales for each period was $539 million and $2.1 billion respectively.

    Continue Reading @: SEC filing reveals Microsoft loses money on each Microsoft Surface tablet sold
     
  2. sharpuser

    sharpuser Super Moderator Staff Member

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    So the loss is less than 10%. A good start for a good product. Volume is growing, and the price point seems to be set about right. I'm glad I did not pay a 10% or 20% higher price for the device, yet Microsoft has a major R&D investment in the device line to recover. Remember, the cost of manufacture is only part of the equation. You must add in the amortized R&D costs.

    Apple took awhile to make a profit on their iPhone, which started around Q4 2007. All things considered, including the Nokia acquisition, Microsoft has a good foothold in hardware.

    And the benefits go to those adopting Surface devices.
     
  3. daniielrp

    daniielrp Active Member

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    ^This

    Pretty sure the Xbox took forever to be profitable too. Just cus it's not profitable in the first couple of years isn't any sign of its future.
     
  4. oion

    oion Well-Known Member

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    Also see Google Nexus phones...
     

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