Microsoft loses $45m on Surface tablet sales

Microsoft is losing money on its Surface tablets, with increased sales actually leading to further losses due to increased production costs.

Microsoft revealed that it shed $45m on Surface devices in its last financial quarter, in a recent filing with the Securities and Exchange Commission (SEC).

The document shows that in the three months ending 31 March 2014, revenues for Surface units hit $494m. However, the cost to produce these devices was $539m. Microsoft said this “increased due mainly to a higher number of units sold”.

The figures are underline how difficult Microsoft has found it to make any headway in the tablet market, with Apple’s iPad still the leading device in the category. Although even Apple has seen sales of the device fall in line with industry trends recently.

The losses on the Surface range of devices could cause new CEO Satya Nadella to ditch the device, although with Microsoft completing its acquisition of Nokia, bringing phone and tablet hardware-manufacturing capabilities in-house, the firm may merge the Lumia range of devices into the Surface portfolio.

:story: V3.co.uk