Surface family still losing money for Microsoft


— 6:00 AM on January 27, 2014

Microsoft doubled down on Surface tablets last September, introducing two second-gen devices with new accessories to match. Has the new gear proved more profitable than the old? Unfortunately for Microsoft, it hasn't.

SEC filings dug up by PC World reveal that Microsoft lost money on Surface sales during its last fiscal quarter. From October through December, Surface sales totaled $893 million. However, the cost of those sales—including manufacturing, distribution, and marketing—amounted to $932 million. Translation: a net loss of $39 million.

This isn't the first time Microsoft has lost money on Surface sales. Last July, the company wrote off a $900-million charge related to "Surface RT inventory adjustments." A couple of weeks later, we learned that, up until that point, the Surface and Surface RT had only generated revenue of $853 million put together.

I suppose that, at this stage, Microsoft might be eager to grab extra tablet market share at the expense of profits. It's not like the company as a whole is anywhere close to the red. Still, considering Apple's gross margin lately, those Surface losses have gotta sting.

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