SEATTLE, July 30 Microsoft Corp's
Surface tablets have yet to make any profit as sputtering sales
have been eclipsed by advertising costs and an accounting
charge, according to the software company's annual report.
The two tablet models, introduced in October and February to
challenge Apple Inc's popular iPad, have so far brought
in revenue of $853 million, Microsoft revealed for the first
time in its annual report filed with regulators on Tuesday.
That is less than the $900 million charge Microsoft
announced earlier this month to write down the value of unsold
Surface RT - the first model - still on its hands.
On top of that, Microsoft said its sales and marketing
expenses increased $1.4 billion, or 10 percent, because of the
huge advertising campaigns for Windows 8 and Surface. It also
identified Surface as one of the reasons its overall production
The Surface is Microsoft's first foray into making its own
computers after years of focusing on software, but its first
attempts have not won over consumers. By comparison, Apple sold
almost $24 billion worth of iPads over the last three quarters.