Microsoft Surface tablets yet to make any money

By Rachel Hand topicIcon Internet News

Surface surplus

Microsoft has revealed that it is yet to make any profit on its Surface tablets.

In its annual Securities and Exchange Commission report published yesterday, the corporation revealed it had generated a total of $853m (£560m) revenue from its tablet devices. The figure includes the Surface RT which launched in October 2012, and the Surface Pro which launched later in February 2013.

Earlier this month, Microsoft suffered a $900m loss for Surface inventory adjustments, after cutting the sale price of the unsold devices by 30 per cent - meaning the project as a whole has made a loss. Meanwhile, the Windows 8 and Microsoft Surface advertising campaign is reported to have cost $898m, while overall production costs also rose due to the device.

Speaking of the Surface project at an internal event last week, Microsoft CEO Steve Ballmer admitted "We built a few more devices than we could sell" and "We're not selling as many Windows devices as we want to".

Game over?

On a more positive note, TechCrunch reminded readers that Surface was only on sale for 247 days out of this annual figure - extrapolated, earnings could well have topped $1bn, the figure that Microsoft aims for in all its divisions. Meanwhile Ballmer has hinted that further generations of the Surface tablet could be in the works.

However, other tablet manufacturers are reportedly losing faith in the Windows RT tablet OS. Asus is the latest rumoured to be abandoning RT in favour of Windows 8, while Samsung has cancelled future RT tablet plans after the Ativ Tab; HP and Toshiba never even launched their planned tablets.

Kleon West, business development director at theEword, commented: "Of course compared to sales of Apple's iPad, these Surface stats look disappointing - but it's early days for this product. If Microsoft really believes in their tablet they will continue to push it and give it another chance, just like they did with Windows Phone and Bing, which were both relatively unpopular at first."