14 DAY TRIAL // As part of its plans to step beyond the software industry, Microsoft is aggressively investing in the hardware business, and the Surface tablet lineup is living proof that the company is looking to get its own share of profit in a market that already belongs to Android and iOS devices.
Needless to say, Microsoft's Surface models haven't been really outstanding as far as sales are concerned, and the company is still believed to lose money with every tablet it sells these days.
As a result, the Redmond-based giant is looking into ways to reduce losses and one of the ways to do that could involve giving up on the Surface business entirely, according to a new report.
Digitimes reveals via “sources from the upstream supply chain” that Microsoft isn't pleased with the way Surface sales are going and “shipment performance has been until now far lower than expectations.”
What's more, the aforementioned sources point out that the second-generation Surface tablets have until now created losses of about $1.7 billion ($1.45 billion) to the company because of unsold units.
As a result, Microsoft reportedly expects Surface Pro 3 shipments to be impacted as well, so giving up on the Surface tablet business is now a scenario that's also on the table, Digitimes adds, citing the same sources.
“Microsoft is not aggressive about development of a next-generation Surface and is likely to terminate the product line,” it says.
Contradicting rumors
Publicly, Microsoft doesn't seem to be willing to drop the Surface lineup and the company promotes its latest models with every single occasion. The Surface Pro 3, for example, which is the top-of-the-range version at this point, is marketed as a true laptop replacement, running the full version of Windows 8.1 and coming with a 12-inch screen and a keyboard.
Recent rumors have even suggested that Microsoft is also working to expand the product lineup with new models, including a Windows RT-powered Surface 3 and a smaller Surface Mini with an 8-inch screen.
This means that rumors indicating that Microsoft could drop the entire Surface lineup aren't exactly accurate, even though it's pretty obvious that the company cannot be satisfied with the way sales are going.
ARM models could indeed be removed
Speculation on the future Surface lineup also comes from long-time Microsoft watcher Mary Jo Foley, who adds that the company could indeed remove the Windows RT-powered devices from its offering.
“I’ve heard from one of my trusted sources that Microsoft’s Surface strategy, going forward, will be to focus on Intel and to cease production of any future ARM-based Surfaces,” she writes.
Again, such a scenario would actually make a lot of sense given the fact that Windows RT tablets are still selling in small numbers, but it remains to be seen if Microsoft is ready to give up on the device after spending millions of dollars not only for development, but also for marketing across the world.