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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Janet I. Tu.

July 30, 2013 at 3:11 PM

Microsoft discloses how much it made in sales of the Surface

Microsoft made $853 million in sales of its Surface tablets in the past fiscal year — almost as much as it had to write down as part of its recent price-cutting on the Surface RT tablets.

The company disclosed that revenue figure in a document it filed with the U.S. Securities and Exchange Commission.

The Surface tablet with Touch Covers (Photo from Microsoft)

The Surface tablet with Touch Covers (Photo from Microsoft)

Microsoft did not say exactly how many Surface units it had sold in its 2013 fiscal year, which ended July 30. But the Surface RT, which became available on Oct. 26, 2012, sold for $500 to $600  each. The Surface Pro, which became available on Feb. 9, 2013, sold for $900 to $1,000 each. Keyboard covers sold for $100 to $130 each.

The $853 million is only a small fraction of the total $19.2 billion in revenue earned by the Windows division last fiscal year.

Meanwhile, the company’s cost of revenue increased year-over-year by $2.7 billion, or 16 percent, primarily because of $1.6 billion in costs associated with Surface and Windows 8, including the $900 million write-down the company took for the $150 price cuts on the Surface RT the company announced earlier this month.

Presumably, a chunk of that $1.6 billion went toward sales and marketing expenses for Windows 8 and Surface. Microsoft said sales and marketing expenses increased $1.4 billion, or 10 percent, year over year, reflecting advertising of those two products.

Revenue from PC manufacturers, meanwhile, decreased 10 percent, after adjusting for a Windows upgrade offer, Microsoft said in the filing.

Other items of interest in the filing:

  • The company’s increased cost of revenue also reflected a $376 million increase in expenses for payments to Nokia related to “joint strategic initiatives.”
  • Research and development expenses increased $600 million, or 6 percent, due mainly to a higher headcount, primarily in the Entertainment and Devices Division — presumably for the Xbox One announced earlier this year. In the past fiscal year, research and development expenses totaled $10.4 billion.
  • Windows Phone revenue grew by $1.2 billion, which includes an increase in patent licensing revenue as well as sales of Windows Phone licenses. Microsoft did not say how many Windows Phone units it shipped.
  • Xbox 360 revenue declined by $950 million, though, because of decreased sales (9.8 million consoles shipped compared with 13 million a year ago) — to be expected given that the next generation Xbox One is set to launch┬álater this year.

0 Comments | More in Microsoft | Topics: surface, surface pro, surface rt

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