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WHEN IS 1.7 MILLION NOT ENOUGH?

August 28, 2013

When you live in the world of small business, it’s hard to imagine that you could sell 1.7 million units of a product and still lose $900 million. But that’s exactly what Microsoft disclosed in its annual report about its Surface tablet computer. The company started selling Surface in October 2012, and in July 2013 they slashed the price.

Microsoft said that the $900 million write down reflected costs involved in making the price cut and writing down the value of components. Assuming all units sold were for $499, the retail price, they sold about 1.7 million in the 12 months ended in June. By comparison, Apple sold 14.6 million iPads in the last quarter alone. Is it time for you to take a look at every product or service you offer and determine if each makes a profit?

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One comment

  1. I had seen that Microsoft took the write down but your post really opened opened my eyes to the volume difference between Apple & their old rival.



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