Microsoft is losing money over Surface sales

Microsoft acknowledged in filings last week that it lost $39 million last quarter selling its Surface tablets.

Microsoft reported sales of $893 million for the October to December 2013 quarter but it also reported the cost of sales at $932 million. “Surface product costs increased with higher volumes sold [and] other costs grew as we read[ied] inventory lines for the Surface 2 launch and the holiday sales cycle.”

Part of the reason is that this is Microsofts first foray into the market of selling hardware. “Surface product costs increased with higher volumes sold [and] other costs grew as we read[ied] inventory lines for the Surface 2 launch and the holiday sales cycle.”