14 DAY TRIAL // The second-generation Surface tablet is said to be a much more appealing product that sells in high numbers, with Microsoft praising the device with every single occasion.
It turns out, however, that the service isn't such a successful product after all, as Microsoft is losing money with every single tablet it sells.
A report coming via Computerworld and citing a filing from Microsoft to the U.S Securities and Exchange Commission shows that while Surface sales are much better now as compared to the same period one year ago, the device is still causing a loss, as the company continues to spend more money than it gets to build the tablets.
The Surface division posted revenues of $494 million (€357 million) for the quarter ending March 31, but at the same time, the aforementioned fillings show that Microsoft invested $539 million (€390 million) to build the sold tablets. This means that in three months, the company lost $45 million (€32.5 million) with the Surface division alone.
Even though Surface sales are not going quite as expected, Microsoft CEO Satya Nadella said at the BUILD 2014 developer conference that the company would continue to invest in its tablet lineup, with innovation now being the main focus for the next models.
“When it comes to Surface itself, we will continue to innovate in driving what I think is the most productive tablet out there in the marketplace. And especially in combination with Office, as we build out these native applications for the new platform, you will see us continue to strive to make Surface the most productive tablet out there in the market,” Nadella explained.
“But when we sort of talk about tablet competitiveness, the key thing that we look at is what is the role of a tablet in a user's device family, because if there was one thing in this morning's keynote, it's the Windows family. It's the consistency for the user, it's the consistency for the developer, and that's what we obsess about.”
Microsoft is reportedly getting ready to debut the Surface Mini, a smaller version of the tablet that could come with an 8-inch screen and Windows RT 8.1 Update.
The company is reportedly trying to make the Surface Mini as affordable as possible in order to compete with the other small tablets on the market, including the iPad mini and the Nexus 7, with some people close to the matter hinting that a $250 (€180) price tag is very possible.