Microsoft’s Surface is becoming profitable…slowly

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Microsoft’s Surface tablets have been a bit of a head-scratcher for some, as the company made moves to eke out a slice of the tablet pie for itself. This was the first time that Microsoft was directly competing with its customers and were also seeking to offer a similar benefit to Google’s Nexus device family – have a halo product that includes the stock OS, no bloatware and the experience that Microsoft thinks best represents what they were trying to do with Windows 8.

For the first year, Microsoft made no money on the Surface line. In July 2013 they had to write off $900 million in Surface RT stock because they couldn’t move it fast enough in time for the launch of Windows 8.1. Now, however, the tide seems to be turning for the software giant.

According to SEC filings discovered by PC World, Microsoft again poured $932 million into their Surface line, the amount which includes manufacture, distribution and marketing of the hybrid tablets. But curiously, it seems that people are far more receptive to the idea of the Surface family this time round – Microsoft made $893 million of that investment back, which translates to a net loss of just $39 million.

Its a massive boost for the company and very likely speaks of how the general trend in computing is moving forward, into internet-connected devices that have hardware just good enough to deliver a lag-free experience. Hybrid tablets are picking up most of the mindshare and we partially have ASUS to thank for this. Were it not for their dockable keyboard with a battery built in, most manufacturers wouldn’t have been motivated to product hybrid designs.

In September 2013, Microsoft debuted two newcomers to the Surface family – Surface Pro 2, powered by a Intel Haswell processor and Surface 2, which uses Nvidia Tegra 4 hardware. Both devices run Windows 8.1 RT, which includes a lot of updates to how Modern UI responds to touch as well as offering some much-anticipated features like portrait mode and better standby connectivity. Windows 8.1 also has DirectX 11.2 baked in with support for tiled resources and a shared API code base with the Xbox One gaming console.

Surface itself was a bold move into where tablet designs should be moving, integrating a kickstand and offering some very tactile feedback for button presses, snapping on accessories and port layouts. I hope that Microsoft’s plans for their devices department continues to improve and scale, urging their partners to make better devices at the same time. All they really need now is a keyboard-less 7-inch version to fill in the gap between Surface and their recently-purchased Nokia devices division.

Source: PC World

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