Sales jump but the Surface remains a money loser for Microsoft.
Microsoft’s outgoing CEO Steve Ballmer had one unexpected announcement during the company’s second quarter earnings report: sales of its troubled Surface tablet have nearly doubled.
During the second quarter, which included the holiday shopping season, Microsoft reported that sales of the Surface doubled to $893 million from $400 million in the first quarter.This comes with a caveat: the Surface is still unprofitable. Though Microsoft brought in $893 million in sales from the device, it still cost the company $932 million to manufacture the units.
Microsoft didn’t release the exact sales figures for the Surface. Considering the tablets have a price range between $450 to $1,800, with the majority of sales being at the $450 level, the company likely sold no more than 2 million units. In comparison, an analyst roundup conducted by Macrumors shows that Apple is expected to announce it had shipped approximately 25 million iPads over the holiday season.
Microsoft is currently facing a class action suit from a group of investors over the Surface, with the group alleging Microsoft’s executive team mislead investors on the success of the tablet in the first half of 2013. The lawsuit is seeking damages for “loss causation” by the rapid drop in Microsoft’s stock after its most recent earnings report.