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July 31, 2013

Microsoft reveals Surface tablet sales figures

The cost of the tablets have been slashed by 30%.

By Duncan Macrae

Surface tablet sales totaled $853m (£562m) in their first eight months on sale, Microsoft has revealed.

The figure suggests that Microsoft may have a hard time trying to make a profit out of the product.

Others figures released show that the advertising budget increased to promote the tablet range.

The filing says the Windows Division’s sales and marketing expenses were $843m higher in the firm’s last financial year than the previous one because of the launch of the Surface tablets and new Windows operating systems.

The firm recently cut the price of the machines by 30%.

Users of the Surface tablets are restricted to running built-in apps or ones that are downloaded from the Microsoft’s own Windows Store, which limits the use of certain applications.

However, the RT versions of Surface are cheaper than the Pro models which are powered by Intel-made chips and are capable of running the full Windows 8 operating system. The RT editions are also thinner and lighter, which has made industry watchers suggest they were designed to appeal to consumers tempted by iPads or Android-based models.

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Microsoft caused surprise in the tech world when it first revealed it would make its own Windows hardware, and companies like Acer and Hewlett Packard put off plans to launch devices running the RT software.

However, Asus did go ahead with an RT-powered version of its Vivotab, but chairman Jonney Shih told the AllThingsD news site that "the result is not very promising" adding that people still wanted to use a lot of classic Windows software that is not compatible with the platform.

Taiwanese firm Acer said it put off plans to launch its own RT devices because of the competition it would face from the Surface product line.

The move was also reported to be the reason Hewlett Packard decided to make devices running either the full version of Windows 8 or Google’s Android OS, but not RT.

Another firm, Asus, did decide to make RT-powered versions of its VivoTab hybrids.

But on Tuesday its chairman, Jonney Shih, told the AllThingsD news site that "the result is not very promising" adding that people still wanted to use a lot of classic Windows software that is not compatible with the platform.

"The problem Microsoft has is that the Surface tablets still aren’t as cheap as many of the Android ones out there, and they can’t compete with the iPad when it comes to the variety of apps," said Benedict Evans, a tech expert at consultants Enders Analysis.

"The one advantage that Surface has is that both versions of the tablet run Microsoft’s Office suite of software – but the programs are still not as touch-optimised as they could be, and the kind of people they would appeal are likely to be more tempted by a laptop."

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