Microsoft makes progress with phone and tablet sales: Surface revenue nears $1B

3 Comments

Credit: Microsoft

Mircrosoft’s quarterly financials positively surprised analysts as the company topped $23.2 billion in revenue. The surprise doesn’t end there though. It took three iterations, but Microsoft seems to have gotten in right with the Surface Pro 3. Surface revenues for fiscal first quarter of 2015 measured $908 million. Microsoft didn’t break out sales figures for the hybrid laptop / tablet. The company is also building revenue from phone hardware, taking in $2.6 billion from quarterly handset sales through what was once Nokia’s hardware business. Microsoft reported $478 million in gross margin from phone hardware as it continues its effort to build market share for Windows Phones.

3 Comments

Rann Xeroxx

At this point its still a vanity project for MS, much like the Xbox always has been. Not a bad thing if it generates positive PR for the company and makes their name brand more recognizable. Companies spend billions for positive press and Surface 3 is finally delivering that good press MS has been seeking with these product line.

MS is only a 3 year OEM vendor so I would give them more time to mature their distribution channels both domestically and internationally. Also the Intel M chip promises to allow fanless devices that are thinner and lighter than even the thin and light SP3 currently is. There is simply no reason to buy an underpowered tablet when you can have a full PC.

avro105

The Surface & Xbox continue to lose money. Gross margins for the quarter were $479 millions, but the cost of revenue that needs to go against that is $770 millions, so a loss of almost $300 millions.

Also note that most sales last year were of the Surface RT at fire sale prices. This year is the much more expensive Surface Pro 2 & 3.

So although revenue went up, unit sales would have declined year on year.

Randy Cunningham

I for one am happy to see the numbers turning around though I must disagree that it took 3 tries to get it right. While I like the improvements enough to have recently spent the huge amount of capital to upgrade from my original Surface Pro to the Surface Pro 3 I do not believe the sales have nearly as much to do with Microsoft getting it right on the third try as it does that they stopped having commercials with goofballs dancing around and are showing what the Surface is now plus the fact the people are finally getting past the demeaning of the bloggers when Windows 8 came out. People have now seen Windows 8 more and while the consensus is still that most people hate Windows 8 and all but most people I deal with get use to it pretty quickly and have no desire to go back. Of course there are some people that still use XP with the Windows 95 start menu option because they hate change and still others that hate it even though they have never tried it. Like I said I think the improvements are great, I love the 12 inch screen over the 10″, the 128GB was a little tight but I have been able to replace my laptop and desktop with the Surface Pro for over a year. Microsoft really dropped the ball with their marketing of the original Surface and Windows 8 but I think they have gotten past that now though I still think the keyboard should be included with the price point set where it is.

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