Microsoft Surface Marketing Budget Exceeds Actual Surface Revenue

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Despite an aggressive marketing campaign (that kicked off with a ‘click’ ad) there were obvious signs that the Microsoft Surface isn’t a hit. Or maybe it is. It hit Microsoft exactly where it hurts the most: revenue.

The company has recently filed its annual Form 10-K with the Securities and Exchange Commission, and from what we could find there it’s obvious: while the $853 million in revenue sounds good for some, Surface sales don’t meet Microsoft’s goals.

While we don’t know the exact number of Surface units sold, a little math and Geekwire helps us: if we hypothetically take the average price of $500 (the original price of the entry-level Surface RT), and divide the aforementioned revenue with it, we get 1.7 million Surface units sold since its launch as of the end of June.

The $853 million accounts for roughly 4.4% of the total Windows Division revenue for the Microsoft fiscal year that ended in June. You may recall that the company took a $900 million write off on Surface RT in an attempt to clear the unsold inventory, estimated at 6 million units.

But the funniest thing about this revenue number is that Microsoft has spent more for advertising Surface and Windows 8 than it made in revenue: the total bill for advertising costs reached $898 million. Compare that with $853 million in revenue form Surface tablets.

Technology enthusiast, rocker, biker and writer of iPhoneinCanada.ca. Follow me on Twitter or contact me via email: istvan@iphoneincanada.ca

  • Jacques

    Well, that’s some funny news. Hope that will teach Microsoft that mocking ads (I know Apple made some too in the past, but with much better taste in my opinion) just ain’t a good idea, just make look them desperate.

  • Just goes to show, marketing can only go so far. Well, mediocre marketing in Microsoft’s case. Not sure how dancing and clicking stands/keyboards sells the feature of a tablet.

  • FragilityG4

    “iPad killer” I think they meant Budget killer!

  • gtasscarlo

    I don’t know why people knock it. It is a good device. But, I didn’t pay $499+tax for it. I wouldn’t pay that much for it. I got it priced match and paid $308 for my RT. It’s a good device but doesn’t have the appeal of an iPad.