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Surface damage mounts at Microsoft as red ink reaches US$1.7 billion

Gregg Keizer | Aug. 5, 2014
The tablet business has lost money each quarter, and each fiscal year.

Dawson picked up on Nadella's "make the market" comment. "Is it still worth 'making the market' if you're not making sales?" Dawson asked. "They're losing hundreds of millions and without a large volume of sales, they're not making the market or rapidly increasing the market for Windows 8 tablets."

The rest of the year will tell the tale. Microsoft has portrayed early Surface Pro 3 sales as promising. "While it's still early, sales are outpacing earlier versions of Surface Pro," chief financial officer Amy Hood said two weeks ago.

"But if the Surface is one, not growing sales; two, losing money; and three, not creating a market, what's the point ultimately?" Dawson wondered.



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