A Microsoft Surface Revenue Bet

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After the introduction of the Surface Pro 3, I tweeted that I thought it would do pretty well in the market. I should have clarified that I meant that in the context of prior Surface sales, but I can’t edit tweets after the fact, so here we are.

Valleywag’s Sam Biddle didn’t agree, and so we made a friendly wager on the matter.

Microsoft reports its earnings tomorrow, and will provide a fresh Surface revenue number as part of that release. I’ve confirmed with the company that the specific Surface figure will be broken out, as per usual.

It seems, however, that I somewhat borked myself in the bet. As it turns out, the $500 million figure was rounded. Surface revenue in the last quarter was actually $494 million (this is why you should never 8-K when you can 10-Q). So I skewed the threshold north by depending on a rounded statistic.

Even more, I presumed that all pre-ordered Surface Pro 3s would see their revenue tallied in the fiscal period. Not so. Only revenue from Surface Pro 3s running Intel Core i5 chips will be counted, as systems running i3 and i7 chips shipped after the end of the quarter, and thus their top line will land in Microsoft’s fiscal first quarter (the current calendar quarter). So a large chunk of revenue that I thought existed the quarter we bet on doesn’t. Oops.

So if I could take out a re-bet, I’d lower my Surface revenue forecasts by 25 to 30 percent. Though, when I’m wrong, I like to do it at full speed.

Please accept this post as an oblation for being quite probably overly optimistic.