Microsoft Just Found a Faster Way to Lose Money on the Surface 3

Since unveiling its first Surface in mid-2012, Microsoft Corporation (NASDAQ: MSFT  ) has lost at least $1.2 billion trying to help the struggling tablet lineup succeed. To be fair, much of that amount stems from a $900 million writedown Microsoft took for "inventory adjustments" around this time last summer. But Microsoft's total cost of Surface revenue has already exceeded sales by at least the remaining $300 million, including a $45 million loss during its most recent quarter alone.

But according to the Fool's Steve Symington in the following video, those losses might be about to increase even more thanks to a new Surface incentive program aimed at winning over current Apple (NASDAQ: AAPL  ) loyalists. Specifically, through the end of July, Microsoft is offering up to $650 in store credit to MacBook Air owners willing to "trade up" to a Surface Pro 3 -- a hefty sum considering Microsoft's entry-level Surface Pro 3 starts at just $799.

More likely, Steve says, is that Microsoft is using the incentive to steer Apple's MacBook Air users toward the premium, higher-margin Surface Pro 3 models. But even then, Microsoft could have its work cut out for it persuading a large enough number of Apple loyalists to jump ship. To hear Steve's full take on what this means for both Apple and Microsoft, please watch the following video.

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Read/Post Comments (7) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 28, 2014, at 4:24 PM, Drichter wrote:

    The Motley Fool just found a faster way to bait clicks and lose respect!

  • Report this Comment On June 28, 2014, at 6:31 PM, skippywonder wrote:

    They won't lose much money doing this because almost no one will take them up on it. The surface 3 is a piece of junk compared to the MacBook Air. Anyone who doesn't agree is not likely to have a MacBook Air to begin with. It's just a stunt. And it has gotten them a lot of free publicity so good for them for thinking of it.

  • Report this Comment On June 28, 2014, at 7:27 PM, JaanS wrote:

    The really sorry thing about this attempt is the comparisons it suggests.

    I assume the $650 credit would be for an iPad Air the 64 GB model of which retails for $700 or $100 less than the low end Surface Pro 3. The Air is at least as powerful as the i3 model and ⅓ lighter.

    So what do you get for your $100? Ability to run Windows applications. Not much more.

    You can see a full comparison of models and features here:

    http://jmmxtech.wordpress.com/2014/05/23/microsoft-surface-v...

  • Report this Comment On June 28, 2014, at 7:29 PM, ban566 wrote:

    who was the fool who stated they would be trading up!!!!!

  • Report this Comment On June 28, 2014, at 7:35 PM, JaanS wrote:

    Note - the table in the post has older prices.

  • Report this Comment On June 28, 2014, at 7:37 PM, JaanS wrote:

    OOPs - my bad - it is MacBooks getting trade-in offers not the iPads.

    Still the comparisons hold

  • Report this Comment On June 28, 2014, at 11:29 PM, Drichter wrote:

    Gotta love the internet.

    Anyone who thinks this thing I've never touched isn't junk hasn't used this thing I really like!

    You'll just have to keep telling yourself that.

    Maybe one day people will grow up enough to realize how narrow-minded that approach to life sounds.

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(Warning, it may shock you)
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