Microsoft's Surface revenue so far revealed: $853m

Microsoft reveals its first sales figures for its slow-moving and now discounted Surface line.
Written by Liam Tung, Contributing Writer

Microsoft has generated $853m from its Surface lineup since first releasing the product line eight months ago, according to its Form 10-K filed with the Securities and Exchanges Commission.

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The revenues cover the period to June 30 from the Surface RT's release in October last year, including the months after the launch of the Surface Pro in February.

While report does not shed light on Surface shipments to date, analyst firm IDC has estimated Microsoft shipped 900,000 Surface RT and Pro devices in the first quarter of 2013.

Earlier this month, Microsoft revealed a $900m writedown due to an Surface RT "inventory adjustment", which made up a large chunk of the $1.6bn increase in product costs associated with the Surface and Windows 8. The writedown also coincided with new discounts on its Surface RT that brought its 32GB ARM-based tablet down to $350 in the US. 

Revenues from Surface were a shade under five percent of the $19.2bn Microsoft's Windows division earned for financial 2013.

Launching the Surface alongside its new operating system has been an expensive exercise for Microsoft: the Surface RT inventory writedown made up half of the $1.8bn cost of revenues for its Windows division in 2013. The division's sales and marketing expenses rose $1bn or 34 percent for the year, largely driven by the $898m increase in Windows 8 and Surface advertising costs, according to Microsoft.  

Higher costs also saw Microsoft's Windows division operating profit fall 18 percent year on year to $9.5bn.

Microsoft also reported for its entertainment and devices division that Windows Phone revenue increased $1.2bn year on year, but how much comes from OEMs like Nokia, which dominates Windows Phone device sales, is unclear since the figure also includes Microsoft's Android patent licensing that covers most OEMs.

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