Microsoft Loses Money On Each Surface Tablet It Sells in the UK

Microsoft Surface TabletMicrosoft revealed recently that the sales of its Surface Tablet has more than doubled and it loses money by selling millions of Surface tablets worldwide, including in the UK. The last quarter was quite for Microsoft and the company outstripped analysts’ prediction by racking up $24.51 billion. Its hardware division contributes about $4.72 billion last quarter, or about 68 percent higher, with its Xbox console lineup as big sellers.

In 2013, the Surface RT suffered poor sales that Microsoft need to write down $900 million worth of unsold inventory. It appears that the Surface tablet is quite a winner now; contributing $893 million to the company. However, upon closer look we would find out that the company spent $932 million for manufacturing, marketing and other costs. This would mean that Microsoft has lost about $39 million in the Surface tablet business.

Nevertheless, we could consider that the company may have finally found a sweet spot in tablet market. Surface tablets are not just for entertainment, but also for productivity-enhancing purposes. We should also consider that there could be some rounding error’s on the company’s bottom line; so Microsoft may allocate a relatively small amount of money to subsidize the tablet.

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