Money down the drain?

How long will Microsoft continue to dig itself in the hole with the Surface tablets? According to this article from citeworld, Microsoft has lost approximately 1.7 billion USD in the last two years since the Surface launched. I do sympathize with Microsoft, they are in a bad position regarding the tablet market. They need to do something to get in the market, but their OEM’s aren’t doing a good job of it. The Surface has been something new for Microsoft, as they decided to go it alone and develop the whole hardware/software package, just like Apple with the iPad. Of course, this alienated their OEM partners who were not used to having to compete with Microsoft in the hardware market, and many of the OEMs went Android for a tablet OS.

Most of what I read about the Surface tablets is positive, but usually with the caveat regarding the fact that the Surface is not really sure what it wants to be, a tablet or a laptop. It seems that the people who like the Surface the most use it as a laptop replacement, and for that it looks like a viable product. However the pricing at that point becomes an issue. For a laptop replacement, the price seems to be around $1000. That seems to be a major issue for the Surface. For less then that, you can get a nice laptop with a touchscreen, and have some money left over, which usually means that the Surface is going to be a niche product, not mainstream. For people who want to go cheap, there are dozens of capable Android tablets that would work. Of course, many people will go with the iPad with its huge ecosystem of apps and accessories.

So where does that leave Microsoft with its Surface? Apparently in the red for 1.7 billion.

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