Microsoft Surface a Flop? Advertising Outpaces Revenue

MicrosoftSurfaceSalesSlow

Microsoft has spent more money marketing its Surface tablet and Windows 8 than the slate has made back for the company. In its annual Form 10-K that the company just filed with the SEC, Microsoft claims that it earned $853 million from the Surface and Surface Pro. During the last fiscal year, Microsoft says there was an $898 million increase in advertising costs associated with Surface and Windows 8. Those numbers don’t paint a pretty picture for Microsoft’s iPad challenger.

Recently, Microsoft announced a $900 million write-down related to the Surface RT, whose price was slashed from $500 to $350. Between the RT and Pro models, Bloomberg reported 1.5 million Surfaces had been sold through March, and Geekwire estimates that total is now 1.7 million.  To put that in perspective, Apple just moved 14.6 million iPads in what was considered a down quarter.

MORE: 25 Worst Gadget Flops of All Time

According to The Verge, Steve Ballmer reportedly admitted during a recent Microsoft town hall meeting that his company built more Surface devices than it could sell. But why aren’t they selling? For one, many consumers still don’t understand the limitations of Windows RT vs full-fledged Windows 8 (the former can’t run desktop apps with the exception of Office). And the more expensive $899 Pro model lasted just 4.5 hours on our battery test, which is well below average for a tablet.

Microsoft also confused shoppers by promoting the Touch Cover with built-in keyboard in its ads only to charge extra for the accessory. The typing experience is better than a touch screen, but not as good as a traditional keyboard. Microsoft offers that, too, but for more money.

Then there’s Windows 8 itself, which offers some advantages over the iPad in terms of multitasking but doesn’t sport the traditional Start button users have come to rely upon. Windows 8.1 will bring the Start button back this fall, but it will only take you to the modern Live Tile menu. Fortunately, the upcoming OS does offer other enhancements like deeper settings options, an improved Snap feature, and better personalization.

Perhaps the lower price of the Surface RT will give Microsoft the boost it needs during the critical back-to-school season. And, presumably, there’s an improved Surface 2 in the pipeline. But with the $229 Google Nexus 7 already making waves, ┬áSamsung’s trio of new Galaxy Tab 3 devices, and both the iPad 5 and new Amazon Kindle Fire HDs on the horizon, the Surface franchise could be in serious danger.

via Geekwire, The Verge

AUTHOR BIO
Mark Spoonauer
Mark Spoonauer
Responsible for the editorial vision for Laptopmag.com, Mark Spoonauer has been Editor in Chief of LAPTOP since 2003 and has covered technology for nearly 15 years. Mark speaks at key tech industry events and makes regular media appearances on CNBC, Fox and CNN. Mark was previously reviews editor at Mobile Computing, and his work has appeared in Wired, Popular Science and Inc.
Mark Spoonauer on
Twitter Google+
LEAVE A REPLY
Name*
Email* (will not be published)
Website
*Indicates required field
Comments*
Submit Comments

FIND A REVIEW
Laptops
All Product Types Accessories Cars Digital Camcorders Digital Cameras eReaders GPS Laptops MP3 & Video Players Projectors Smartphones Software Storage Tablets / MIDs VoIP Wi-Fi
All Subcategories
All Subcategories All-Purpose Budget Business Desktop Replacement Gaming Multimedia Netbook Nettop Rugged Student Tablet PCs Ultraportable
Brand
Acer Alienware Apple Archos ASUS Averatec BenQ CTL Corp. Dell Digital Storm eMachines Emtec Everex Fujitsu GammaTech Gateway General Dynamics Getac Gigabyte Hercules HP HTC iBuyPower Intel Lenovo MSI Nokia Nvidia OCZ OLPC OQO Origin Panasonic Sager Samsung Sony Sylvania Systemax TabletKiosk Toshiba Verizon Viewsonic Viliv VooDoo Workhorse PC ZT Systems
Minimum Rating
Any Rating Editor's Choice 4.5 Stars 4.0 Stars 3.5 Stars 3.0 Stars
Screen Size
10 11 12 13 14 15 16 17 18 20 4 5 6 7 8 9
Resolution
1024x576 1024x600 1024x768 1200X800 1280 x 720 1280x1024 1280x768 1280x800 1366x678 1366x768 1440x1050 1440x900 1600x768 1600x900 1680x1050 1680x945 1920x1080 1920x1200 800x400 800x480
Weight Range
10.1 - 12.0 pounds 12.1 - 14.0 pounds 14.1 - 16.0 pounds 2 lbs 2 pounds and under 2+ lbs 2.1 - 4.0 pounds 4.1 - 6.0 pounds 6.1 - 8.0 pounds 8.1 - 10.0 pounds Over 16 pounds Under 2 pounds
more options
SUBSCRIBE