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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.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

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:

  • 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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Leaked: Apple's Next Smart Device
(Warning, it may shock you)
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Steve Symington

Technology and consumer goods specialist for the Fool. Steve looks for responsible businesses which positively shape our lives. Then, he invests accordingly. Enjoy his work? Connect with him on Twitter & Facebook so you don't miss a thing.

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