Microsoft's tablets fail to take off

by CXOtoday News Desk    Aug 01, 2013

Microsoft

Microsoft’s foray into tablet manufacturing hasn’t been a smooth ride in the past eight months. The Microsoft Surface line has failed to generate profit since it launch in 2012. Both the Surface RT and the more expensive Surface Pro has not been able to excite customers.

 

In the annual report filed by Microsoft with the U.S. Securities & Exchange Commission (SEC), revealed that Surface raised $853 million in revenue, which has been over-ridden with the expenses incurred by the company including a $900 million write-off and a $898 million spent in advertising costs.

 

To bolster sales, Microsoft has offered a 30 percent discount on Surface RT model. Despite Microsoft’s best efforts, the sales constitute a mere 3.3 percent of Apple’s iPad sales. Microsoft has not yet disclosed the number of units sold of the Surface line but Sameer Singh, a smartphone and tablet analyst who writes at Tech-Thoughts said he was unimpressed with the pricing of the range. ASP range of $370 to $430 was low since it included the higher end Surface Pro. “It looks like sales have been poor for the Surface Pro, depending on build numbers, I wouldn’t be shocked if we see another inventory write-down for the Surface Pro over the next few quarters.”

 

However Microsoft is determined to continue with the Surface line and has promised to invest in new software and hardware products, services, and technologies such as the Surface line.