DigiTimes Sees Microsoft Surface Tablet Future As Bleak

Early on Thursday, DigiTimes released a report citing "upstream supply chain" sources saying that Microsoft (NASDAQ: MSFT) will be stepping out of the tablet business, at least when it comes to the Surface.

The report also noted the first and second-generation Surface tablets created an estimated loss of ~$1.7 billion due to a lack of distribution partners and high prices.

Based on this, as well as the impact smartphones are having on the tablet market, the DigiTimes sources believe it is unlikely the Surface Pro 3 will sell one million units. Instead, they fell it is more likely Microsoft will ultimately terminate the product line.

The Street doesn't appear to be taking the rumor to heart as shares of Microsoft are trading relatively steady in the beginning of Thursday's market session.