Is The Surface Line Of Tablets in Trouble?

Why Is Everyone Saying The Surface Line Of Tablets in Trouble?

OK, let’s talk about the elephant in the room…

I’m sure you have all heard the media touting the big losses Microsoft had supposedly incurred on the Surface line of tablets in the last fiscal year. Specifically, last month Computer World released their speculations about the alleged $1.7 billion in losses that Microsoft suffered on the Surface line of tablets.

This of course began a media frenzy and as always, they were like sharks looking for blood in the water. The Microsoft losses have been talked about constantly for over a month. This quick, unfair Microsoft treatment by the media is the main reason we started this website.

Computer World pulled information on profits from a report that Microsoft submitted to the government in July, estimated the costs based on their own info and calculated just how much Microsoft has lost this year.

Reading the article, perhaps I should worry, after all I’ve invested in four of their tablets so far, but I’m not and here is why:

  1. Computer World’s losses are a speculation. They base them on their own calculations which they say is based on historical data of costs. Even the analysis by Jackdaw Research is speculation, only Microsoft knows how much they lost, if anything.
  2. The Computer World article talks about the heavy costs of research and development spent by Microsoft. Well, there is a lot more considered in a product decision than just R&D. And the Surface Pro 3 new sales are counting for the new quarter, so will they just be pure profit?
  3. I believe the Surface tablets are excellent devices. Yes, I know the arguments that Apple fans make for the iPad and MacBook Air but honestly, 99% of the time, I find that they do not compare apples to apples – pun intended.
  4. I believe the Surface fits a very specific niche, i.e. Windows tablet and a tablet/laptop in one. I think many folks love this idea – I certainly do – and are waiting for these products to mature. Let’s face it, most new technologies don’t become an overnight hit. It takes some time. Besides other company’s are already starting to get in on this market. See my post on Surface Pro 3 vs. HP Envy X2.
  5. I keep going back to the Surface Pen, it’s totally stellar, no one else has even come close to creating anything as good for an every-day tablet, and I think it’s here to stay for both artists and students or anyone one else that needs to take notes.
  6. The Surface is reported to be sold out in many countries (it is available in 28 countries), and in fact it seems that every time Microsoft announces a sale here in the U.S., the devices sell out as well. I mean, take the Surface 2 sale for example, by the second day, they were sold out of all but the 4G model. They restocked and some have sold out again – Just sayin’ that the numbers speak for themselves
  7. Last but not least (and my favorite) is the argument used by some internet media, saying that Microsoft has a history of dumping new devices that don’t perform well, like the Zune or the Kin. To that I say, have you seen the Xbox? That too is a product that Microsoft is supposedly losing so much money on and yet here it still is today after 13 years and it is still going strong. So, if anything, I would say Microsoft has a history of patience of standing behind their products.

So is the Surface line of tablets in trouble? I could be wrong, but I don’t think so.

What do you think?


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