Microsoft's Surface RT tablet is more profitable on a per-device basis than an iPad, said research firm IHS.
IHS's recent teardown of the Surface RT tablet revealed that the 32GB version of the device carries a bill of materials (BOM) of $271. The firm also reports that the device costs $13 to manufacture bringing the total cost to build the device to $284.
"The Surface represents a key element in Microsoft's strategy to transform itself from a software maker into a devices and services provider," said senior principal analyst of teardown services for IHS, Andrew Rassweiler.
"Key to this strategy is offering hardware products that generate high profits on their own, similar to what Apple has achieved with its iPad line. From a hardware perspective Microsoft has succeeded with the Surface, offering an impressive tablet that is more profitable, on a percentage basis, than even the lucrative iPad based on current retail pricing."
Microsoft is set to make over $300 on each Surface RT sold, according to IHS's research. The mark up would mean that the company makes more money on a per-device basis than any of its competitors.
Apple has long been known to sell products that offer strong profitability on a per-device basis. For example, the iPad Mini costs $198 to make but retails for $329.
Microsoft's decision to build devices with a high profit margin also goes against the strategies of competitors such as Amazon. The Kindle Fire maker reportedly sales its devices at cost.
According to Amazon chief executive Jeff Bezos, the reason for this is to propagate Amazon services before profiting off of device sales.
Microsoft may find that it's profiting on each Surface sold, but some of its OEM's are still upset that the company is making hardware.
Acer's president of Greater China Linxian Lang recently told the Chinese website Sina Tech that Microsoft will find out that making hardware is like "[eating] hard rice".
According to Linxian, Microsoft should have stuck with software and left hardware to companies like Acer. This isn't the first time Acer has criticised Microsoft for getting into hardware. Earlier this year, Acer chief executive JT Wang also said he warned Microsoft that the Surface Tablet was a bad idea.
Cotton seedling freezes to death as Chang'e-4 shuts down for the Moon's 14-day lunar night
Fortnite easily out-earns PUBG, Assassin's Creed Odyssey and Red Dead Redemption 2 in 2018
Meteor showers as a service will be visible for about 100 kilometres in all directions
Saturn's rings only formed in the past 100 million years, suggests analysis of Cassini space probe data
New findings contradict conventional belief that Saturn's rings were formed along with the planet about 4.5 billion years ago