Microsoft’s hardware business takes a hit as Surface sales sag and Windows Phones fade

“Four little words from Microsoft CFO Amy Hood describe the tragic state of Microsoft’s mobile experiment: ‘negligible revenue from phones,'” Mark Hachman reports for PCWorld.

“Phone sales for the current quarter were bad, falling $730 million from the same period a year ago, Microsoft executives said Thursday during the company’s second-quarter earnings call,” Hachman reports. “But they can’t fall much further: Hood was referring to a forecast of the current quarter ending in June, when sales of all Microsoft-branded phones will apparently trickle off into oblivion.”

“Microsoft also said it suffered lower-than-expected sales of Surface Pro products, with an overall drop of 26 percent in Surface revenue,” Hachman reports. “While the company has repeatedly insisted Windows Phone isn’t dead, however, the slow fade of its own phones doesn’t help the platform’s prospects… Microsoft essentially paid $7.17 billion for a Nokia phone business that went nowhere.”

MacDailyNews Take: As we wrote back in September 2013 on the occasion of Nokia unloading its handset business to Microsoft for a ridiculous $7.2 billion:

Steve Jobs killed Nokia long before [Microsoft’s Stephen] Elop got there to pull the plug.

“Microsoft’s Surface revenue fell to its lowest point in the last five quarters, with just $831 million in total revenue,” Hachman reports. “Microsoft hasn’t refreshed the Surface Pro series since Oct. 2015, when it launched the Surface Pro 4 and Surface Book. ”

Read more in the full article here.

MacDailyNews Take: After all these years, there’s still nothing that rivals basking in the warm schadenfreude of Microsoft failure!

A “tablet” with an identity crisis is not the future… If Microsoft were really sure of themselves in Jobsian fashion, they would have devoted all of their efforts to Windows RT/ARM tablets… iPad will continue to offer the only known quantity in the market, the only true “tablet” with any real developer support, and the only one with a massive and vibrant ecosystem (both hardware and software).

Apple’s iPad is the only tablet into which any sane person or business would ever invest their hard-earned money. If your company ever buys Microsoft Surface tablets – either of them, but especially Windows 8 Pro/Intel ones – get your resume ready. You’re stuck at a place that’s prone to making horrendous decisions and is hopelessly mired in the past.

As if they needed it, Microsoft’s “Surface” debacle is even more good news for Apple. — SteveJack, MacDailyNews, June 19, 2012

On that note, TGIF and, snap to it, interns: TTK!

SEE ALSO:
Fake news: Microsoft Surface vs. Apple iPad, Mac – April 28, 2017
Microsoft’s Surface Studio boondoggle – January 3, 2017
Apple’s new MacBook Pro outsold all other laptops in first five days – November 9, 2016
The debate is over: IBM confirms that Apple Macs are $535 less expensive than Windows PCs – October 20, 2016
A single quarter of iPad Pro sales will exceed the total of all Microsoft Surface tablets ever sold – November 24, 2015
Microsoft’s Suicide, er… ‘Surface’ – June 19, 2012

24 Comments

    1. Big acquisitions are often big money wasters. Many people are calling for Apple to make major acquisitions, but Apple needs to move carefully or it could waste tens of billions.

      In the case of Disney, at least Apple would be buying a lot of concrete assets – movie library, theme parks, etc. Nintendo has gaming IP (Mario, et. al.) that could offer a lot of value on iOS and the Mac over time. But, if Apple were to buy Netflix, it is mainly buying a media distribution system, and that distribution system is based on contracts with content providers. Netflix is only worth as much as its contracts – Apple needs to stay away from Netflix.

  1. Is everyone still bleating on about the ‘success’ and ‘threat’ of Surface I cant be bothered to check as nothing you read is remotely of the real world where that is concerned.

    As for that surface desktop it might appeal to the easily pleased (and desperate) sort or fanboi press but fact is even though Microsoft produced it as a loss leader to garner such overblown hype it is in the cold light of day than even some of the fanbois admit quietly still too expensive and too under powered. Its great to play with for a bit but once you have to get down to real practical work, for all but a few percent even of the pro design market, it really is no more than an expensive plaything. But then Microsoft didnt build that to sell in any great numbers, indeed it was probably their greatest fear that they might and no doubt cost them the time and expense of actually building them once the publicity effect died down.

    If Apple had produced it, it would have been ridiculed and slated endlessly and that is the real message about the state of the press and analyst objectivity perhaps around technology certainly. It also shows just how difficult it is for Apple to make a substantive move in anything they do, not that I am excusing them from practically not doing it all all of late as a result, for that generates its whole own round of slating.

  2. What I’m disappointed about is that M$ haven’t made anymore dumbass purchases for a while. I need them to put their cash in more useless ventures. Although their monopoly in PC software is slowly waning, I want the decline to speed up. Wasting their cash on phones and now the pathetic surface offerings is good. I wish they would purchase more companies with negative growth prospects.

    1. Based on the article this MDN post references, MS’s cloud business is doing rather well with increases of about 28% in profit and 8% in revenue vs a year ago. Since Surface and phone’s seem to be a rather small portion of MS due to average to low success and cloud sales seem to be growing it is hard to discount MS just yet.

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