Microsoft gets less revenue from sales of Surface devices

Microsoft has seen less revenue from the sale of devices under its Surface brand in recent months. Turnover from that branch fell by 26 percent. According to Microsoft, this was due to increased competition on price and because products are reaching the end of their cycle.

The only new product in the lineup was the desktop Surface Studio, but since that’s a high-priced product aimed at a small audience, it won’t have boosted sales that far. Microsoft is not making any statements about specific products and quantities shipped, saying only that the Surface Pro tablets underperformed as expected.

The Surface Pro 4 is from the end of 2015 and there is no successor yet. The Surface Book is from the same era, although Microsoft has released a more expensive version called Performance Base. Moreover, the Surface Book is now also available in the Benelux, for example. Microsoft has two events planned soon where it can show off new hardware. Next week, the company has an education-linked event, presumably focused on low-cost laptops. This is followed by developer conference Build.

Microsoft’s telephone division saw sales fall by 51 percent. According to the company, there is “no material turnover this quarter” from the Lumia line. The last Lumia came out more than a year ago and now Microsoft probably hardly supplies any phones. Microsoft’s Azure branch posted 93 percent revenue growth.

Microsoft delivered fewer Xbox consoles than a year ago, presumably due to the imminent arrival of the new console Scorpio, which allows gaming in 4k. The company did make more money from gaming than a year ago due to an increased number of Xbox Live users. There are now 52 million subscribers to the service.

The number of subscribers to Office 365, the subscription service for Office applications, grew by 35 percent to more than 100 million. Turnover from that branch grew by 45 percent. Microsoft’s revenue exceeded $22 billion, with operating income of $5.6 billion.