Microsoft Phone Business Revenues Drop While Azure Revenues Rise

Microsoft’s revenue from Azure cloud services is up more than 100 percent, while its telephone division’s revenue fell 71 percent. Surface showed a 9 percent sales increase. The company made this known during the presentation of the quarterly and annual figures.

In total, Microsoft had revenues of $85.3 billion in the fiscal year ended June 30, 2016 with net income of $16.798 billion. According to Microsoft, the increase in sales of Surface products is mainly due to Surface Pro 4 and Surface Book. However, that positive result was strongly dampened by the fact that the entire ‘Devices’ sales fell by 35 percent due to the lower revenues from the sale of telephones by 71 percent.

Also, revenue from the gaming segment was nine percent lower, mainly due to 33 percent less Xbox hardware sold. The loss there was mitigated by the Xbox Live division’s increasing revenues of 4 percent, primarily due to growth in purchases and revenue per transaction.

Search ad revenue grew 54 percent. This is mainly due to Bing. As the last part of the Personal Computing part of the turnover figures, Microsoft mentions the Windows operating system. The non-pro OEM version of Windows in particular contributed to the turnover with 27 percent. Microsoft sees a stabilization in sales in the PC market and more business PCs sold with Windows Pro.

Overall, Personal Computing revenues declined $346 million or 4 percent to $8.9 billion with the aforementioned Devices and Gaming businesses being the main drivers of the decline.

The Intelligent Cloud business grew 7 percent in revenue, mainly due to Azure, which saw a 102% increase over the same period last year.