Microsoft takes $900m hit on Surface tablets

Microsoft’s foray into the hardware market is not going smoothly as it revealed in its quarterly results that it has taken a $900m charge related to inventory adjustments for its Surface RT tablet. The charge had an impact of $0.07 per share, the firm added.

Microsoft shipped just 900,000 units in the first quarter of 2013, according to research firm IDC. However, it has not deterred the firm from pursuing its hardware ambitions, according to CEO Steve Ballmer.

“We are working hard to deliver compelling new devices and high value experiences from Microsoft and our partners in the coming months, including new Windows 8.1 tablets and PCs,” he said.

He added that firm is focusing its “energy and resources on creating a family of devices and services for individuals and businesses that empower people around the globe.”

Microsoft launched the Surface tablet in June last year in a move that risked irking its OEM partners. Ovum analyst Jan Dawson said at the time: “What does it say about the tablets Microsoft is seeing from its OEM partners as it gets ready to launch Windows 8, that they felt they needed to launch their own tablet? Either they are not happy with the devices out there, or they are not satisfied with only taking a licence fee from selling Windows based tablets. Either way, it is a huge vote of no confidence in its OEM partners.”

The firm also reported in its quarterly earnings report revenue of $19.9bn for the quarter ended June 30, 2013. Net income stood at $4.97bn.