by Anton Shilov
01/24/2014 | 03:34 PM
Microsoft Corp. has revealed that sales of its Surface media and business tablets increased during the second quarter of fiscal 2014, which ended December 31, 2013. While the unit shipments of Surface are barely high, it is still noteworthy that the recent changes of Microsoft’ hardware (by introducing Surface 2-series) and software helped the software giant to boost demand for its slates.
The Redmond, Washington-based company has reported that Surface revenue more than doubled sequentially, from $400 million in the first quarter to $893 million in the second quarter. At the same time, Microsoft admitted that Surface cost of revenue was $932 million, which indicates that it lost at least $39 million on its tablets.
Microsoft did not specify how many Surface RT and Surface Pro slates it sold during the quarter. But assuming that the average selling price of a Surface-branded device is $700, then the software giant sold approximately 1.275 million of various Surface tablets in the fourth quarter of 2013, which includes sales during the holiday season.
“With Surface, demand continued to grow, benefitting from improved execution at retail and favorable reviews of the new Surface devices. 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,” said Amy Hood, chief financial officer of Microsoft, during a conference call with investors and market analysts.
One of the key reasons of low popularity of Microsoft Surface RT tablets is the Windows RT operating system. On the other hand, many people replace traditional laptops with Surface Pro since it is slimmer and is well-built.
Windows RT is a fully-fledged Microsoft operating system compatible with ARM-architecture application processors and incompatible with the vast majority of programs developed for Windows, something that clearly discourages anyone from using it. Given the fact that it carries Windows name, it confuses many buyers as people expect compatibility with their applications. Many PC makers, including Toshiba and Samsung, decided not to offer Windows RT-based devices early in the lifecycle of the OS so to avoid the misunderstandings. Other manufacturers, such as Dell, discontinued their Surface RT-powered offerings.