Microsoft admits losing money due to Surface tablets

By IVCPOST Staff Reporter

Jul 31, 2013 04:31 AM EDT

On Tuesday, Microsoft Corp's yearly report that was filed with the regulators revealed that its Surface tablets brought in a profit of US$853 million. However, the report also showed that the tablets have yet to generate any revenue since its sales were eclipsed by its advertising costs and an accounting fee.

Microsoft's tablet models were launched in October 2012 and February this year. They were supposed to challenge Apple Inc's iPad and Google's android tablets. The earnings were less than the U$900 million charge Microsoft publicized in the first few days of July. The figure was used to write down the worth of Surface RTs that were not sold.

Also, the company admitted that its sales and marketing costs climbed by US$1.4 billion or 10% due to Windows 8 and Surface tablets' advertising campaign. It also specified that the Surface tablets were the reason its total production expenses increased.

The Surface was supposed to be Microsoft's first entry to the tablet market. It even hoped to get the attention of Apple's customers. By comparison, the iPads made by Apple were shipped around the world and Apple earned about US$24 billion from iPads during the last quarter.

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