Featured Articles

Nvidia GTX 980 reviewed

Nvidia GTX 980 reviewed

Nvidia has released two new graphics cards based on its latest Maxwell GPU architecture. The Geforce GTX 970 and Geforce GTX…

More...
Nvidia adjusts GTX 980 and GTX 970 pricing

Nvidia adjusts GTX 980 and GTX 970 pricing

It appears that Nvidia has been feeling the pulse of the market and took some note from comments regarding the original…

More...
iPhone 6 and 6 Plus reviews are up and they are good

iPhone 6 and 6 Plus reviews are up and they are good

Apple is dancing the same dance year after year. It releases the iPhone and two days before they start shipping it…

More...
Amazon announces three new tablets

Amazon announces three new tablets

Amazon has just released three new tablets starting with the $99 priced 6-inch Kindle Fire HD6. This is a 6-inch tablet…

More...
PowerColor TurboDuo R9 285 reviewed

PowerColor TurboDuo R9 285 reviewed

Today we will take a look at the PowerColor TurboDuo Radeon R9 285. The card is based on AMD’s new…

More...
Frontpage Slideshow | Copyright © 2006-2010 orks, a business unit of Nuevvo Webware Ltd.
Thursday, 07 August 2014 11:05

Microsoft spends $1.7 billion to make Surface a hit

Written by Nick Farrell



Wouldn’t it have been better investing in a horse?

While interest in Microsoft’s Surface Pro 3 tablet is increasing it seems that the growth has come at an enormous cost. Computerworld found that Microsoft revealed in an 8-K statement filed with the Securities and Exchange Commission this week that it has lost $1.7 billion on its Surface line of tablets so far, which is nearly double the $900 million write down that Microsoft took last year on unsold Surface inventory.

Microsoft’s operating income last quarter was $6.48 billion and its earnings per share only narrowly missed Wall Street expectations after posting better-than-expected earnings the quarter before. Things could have been a lot worse. Microsoft to launch the smaller-screen Surface Mini alongside the Surface Pro 3 in May, but changed its mind at the last moment, reportedly because it feared the tablet would not sell well.

Most of the cash Microsoft is spending is on the manufacturing expenses for the Surface Pro 3 line, which Microsoft started selling, but only in limited quantities, near the end of quarter. Although most sales would presumably be recorded in the following quarters, the initial production costs would have been booked into the June period. The fully-fleshed-out line only reached retail on Aug. 1.

If Microsoft had not created a Surface and invested half the money on a dead cert at Derby, it could still be quids in. Funny thing is that if Steve Ballmer had told shareholders he lost millions on a horse they would get upset, but Wall Street is ok with you wasting cash on a product which is too expensive for anyone to afford.

blog comments powered by Disqus

 

Facebook activity

Latest Commented Articles

Recent Comments