The Register gleaned something I missed from M$’s 10-Q. M$ is actually losing money selling it’s shiny new Surface devices… How can that be?
I missed this gem because it was in the “9 months” period, not just the last quarter.
“Nine months ended March 31, 2014 compared with nine months ended March 31, 2013
D&C Hardware revenue increased $2.9 billion or 55%, due primarily to $1.5 billion or 38% higher Xbox Platform revenue as well as Surface revenue growth. Surface revenue was $1.8 billion for the nine months ended March 31, 2014. Xbox Platform revenue increased due to sales of Xbox One, which sells for a higher price than Xbox 360. We sold 10.6 million Xbox consoles during the first nine months of fiscal year 2014 compared with 8.9 million Xbox consoles during the first nine months of fiscal year 2013. Surface revenue increased due to a higher number of units sold.
D&C Hardware gross margin decreased $728 million or 45%, due to a $3.6 billion or 98% increase in cost of revenue, offset in part by higher revenue. Xbox Platform cost of revenue increased $2.0 billion, due mainly to higher volumes of consoles sold and higher costs associated with Xbox One. Surface cost of revenue was $2.1 billion for the nine months ended March 31, 2014, which increased due mainly to a higher number of units sold. “
Do the maths: it cost M$ $2.1billion to sell $1.8billion worth of Surfaces… That’s a loss of $300 million. Eewww! Even without charging itself the tax, they can’t compete in the market. How are regular OEMs expected to survive with the high cost of M$’s OS? Chuckle. M$’s business methods are shown to be unsound. Why, then, do most of the world’s businesses toe the line that M$ is the one true source of IT? It’s time the world moved on. M$ is not the answer. They are the problem. M$ cannot even make money providing complete systems using their software. How can any user profit from using M$’s software if the user has to pay extra for the privilege of running the hardware? FLOSS and GNU/Linux are the answers. The world can and does make its own software with no help from M$.