Microsoft Surface More Than Doubled In Revenue To $908 Million, And It's Sorta Profitable

There’s lots of good news in Microsoft’s earnings report and one piece is that Surface revenue hit $US908 million for the quarter.

A year ago, Surface revenue was a modest $US400 million and even last quarter, revenue was only $US409 million.

And Microsoft tells us that Surface became profitable for the first time this quarter, on a gross margin basis. Gross margin is revenue minus the cost to build the Surface. When you factor in marketing costs, and other stuff, the Surface is still losing money. Still! The Surface had never been gross margin positive before.

Microsoft says the boost is thanks to the new Surface Pro 3. This is the back-to-school quarter which is usually a good one for PC sales. So if Microsoft hadn’t reported improved revenue for its PC line-up, that would have been concerning.

But, to put it in perspective, Apple said it sold a record 5.5 million Macs, about $US6.6 billion in revenue. So Microsoft still has some work to do in chasing Apple, as was its intention when former CEO Steve Ballmer opted to start making Microsoft-branded tablets.

Still, sales are trending up, way up, and that’s a good start.

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