Microsoft Reveals Weak Surface Sales

Microsoft Surface RT

Microsoft suffers weak Surface sales

Microsoft has submitted documents with the United States Securities and Exchange Commission revealing that the company suffers from weak Surface sales.

In a regulatory filing with the commission, Microsoft said that its Surface tablets had earned a revenue of US$853 million in its fiscal year that ended last June 30. It seems a lot, but it is actually less than what Microsoft paid to write down unsold stocks of the tablet.

The Redmond-based software company did not disclose how many units of either the Surface RT or the Surface Pro were shipped during the time period. However, Microsoft announced earlier this month it paid for Surface RT inventory adjustments (read: unsold tablets) by approximately $900 million. The company also reported a $898 million increase in advertising costs, as Microsoft extensively promoted the Windows 8 operating system and the Surface.

Microsoft reports about weak Surface sales.

The Microsoft Surface tablet was aimed to compete with the iPad and other similar devices. The tablet has two versions: the Surface RT with an ARM-based processor and Windows RT operating system; and the Surface Pro that runs on Windows 8 and an Intel processor. Microsoft designed and manufactured the tablet themselves, much to the dismay of some of its hardware partners who are using to deal with Microsoft as a software supplier, rather than as a competitor in mobile computing hardware.

The weak Surface sales were seen early on. Microsoft shipped approximately 900,000 Surface units in the first quarter of the year, giving the company a mere 1.8 share in the tablet market. Apple dominated the market with 19.5 million iPad shipments and close to 40 percent in market share, while Samsung followed closely with 18 percent, Asus at 5.5 percent, and Amazon.com at 3.7 percent.

The tide dies not even turn in favor of Microsoft after it has slashed the price of its Surface RT by $150.

Despite the disappointing news about weak Surface sales, Microsoft said in the filing it will continue to invest in its tablet business.

Source: PC World

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