Over the past 2 years or so, Microsoft has admitted to losing about a billion dollars on the Surface RT project alone. Then came the news about a new loss, this time $39 million last quarter for the Surface tablets again. And today we learn each such slate is a loss itself…
Microsoft did report increased Surface revenue for the October-December quarter, reaching $893 million, which is double from the previous quarter. However the cost of that revenue was $932 million, so in the end it’s big fat minus in the budget. The cost of revenue is basically the money spent on assembling tablets, but also the distribution and marketing for those devices.
Last September the second gen Surface models debuted and Microsoft also kept the first gen Surface RT in its offer for $299, trying to get rid of the product that caused them a $900 million hole last year. Well, in Q3 Microsoft’s Surface revenue was $400 million and the cost of revenue was $645, so you get the picture…
The Surface Mini may finally change the game, unless Microsoft allows Nokia to pull out an 8 inch slate from the hat and kill their project…
