Microsoft Corp.’s Surface series of media and business tablets is staring to gain traction on the market. According to the company’s latest financial results, sales of Surface doubled in the second quarter of the fiscal 2014 (calendar Q4 2013). Unfortunately, the slates still bring only losses to the software giant.
Sales of the Surface RT and Surface Pro tablets Surface more than doubled sequentially, from $400 million in the first quarter of FY2014 (calendar Q3 2013) to $893 million in the second quarter of FY2014. Still the company announced that Surface cost of revenue was $932 million, which means that the Redmond, Washington-based giant lost at least $39 million on its tablets.
Microsoft did not reveal how many Surface units it actually shipped during the quarter. The company also did not reveal details about the mix of Surface tablets it sold in Q4, but only noted that the popularity of Windows RT-based slates grew.
“With Surface, demand continued to grow, benefitting from improved execution at retail and favorable reviews of the new Surface devices,” said Amy Hood, chief financial officer of Microsoft, during a conference call with investors and market analysts. “Sequentially, both units and revenue more than doubled this quarter, with customers recognizing Surface’s differentiated value proposition as one device for everything in their life. We feel good about the progress we have made over the past couple of quarters, and are enthusiastic about the overall opportunity ahead with Surface.”
Microsoft Surface tablets originally received lukewarm reception by the end-users mostly because of Windows RT operating system. The latter does not support programs developed for traditional Windows and x86 microprocessors and is only compatible with modern apps featuring Metro interface. Microsoft has managed to improve Surface hardware with the second-gen Surface 2 family and software with Windows RT 8.1, as a result, popularity of the tablets increased in the fourth quarter of calendar 2013.
KitGuru Says: Assuming that the average selling price of a Surface-branded tablet is $700, then Microsoft shipped only about 1.275 million of various Surface slates in Q4 2013. Not a lot for the holiday season, eh?