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Early Surface Sales Pitiful
Nerval's Lobster writes "Microsoft has earned $853 million from sales of its Surface tablets, according to the company's annual Form 10-K filed with the SEC. That's a bit of a disaster, to put it bluntly. Earlier estimates put Surface sales at roughly 1.5 million units; the $853 million figure reinforces that projection. By comparison, Apple sold 14.6 million iPads in its last quarter alone. Adding insult to injury, Microsoft spent quite a bit producing and marketing Surface. The Windows division's 'cost of revenue increased $1.8 billion, reflecting a $1.6 billion increase in product costs associated with Surface and Windows 8, including a charge for Surface RT inventory adjustments of approximately $900 million,' read the Form 10-K. 'Sales and marketing expenses increased $1.0 billion or 34 percent, reflecting an $898 million increase in advertising costs associated primarily with Windows 8 and Surface.' Overall, Microsoft's Windows division earned $19.2 billion in its fiscal 2013."
All those ads with people dancing around snapping covers on and off - opening and closing weren't enough to evangelize the masses as to the virtues of the technology?!?
As much as I hate Microsoft - it's sad to say - that the [very, very] few people who I know who actually had a Surface had nothing but RAVE reviews about them. The summary was: "Size/weight of an iPad - but with a real keyboard. I could take it to meetings, and actually run Word, Excel, PowerPoint, and Outlook. I could actually take notes with the keyboard - and not some "add-on" iPad type keyboard which made the iPad as big and bulky as a small laptop or netbook".
So in short - it was a real "productivity" device - not like tablet, which I still don't think is really good for anything but *light* web browsing and watching movies on a screen, the size of what we used to watch them on in the 70's.
Hollywood accounting?
It would be Hollywood accounting if they had sold 20 million units in the last quarter but still managed to loose billions of dollars.
Any insufficiently advanced magic is indistinguishable from technology.
Microsoft's view was that the iPad and similar Android tablets were fine for media consumption but were really lacking when it came to creating. Having a physical keyboard without adding significant weight or bulk was a killer feature in their mind.
A lot of people felt that Microsoft did an excellent job in designing the keyboard. A key point they missed though is that once you stick a keyboard on a tablet like that there's not much distinction between it and a small laptop. So why not just get a laptop?
One of the nice things about a tablet is that you don't need an flat surface available in order to use it. Microsoft's own Surface commercials show a bunch of people sitting around a table. A tablet that requires a desk in order to take advantage of one its key features isn't going to set the world on fire.
At least with laptops, I can stick Linux on them when their version of windows gets too bogged down with viruses.