Microsoft Surface sales boom amid tepid iPad demand

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in iPad
Microsoft on Thursday announced earnings of $4.9 billion on revenues of $22.3 billion for the first fiscal quarter of 2017, a Wall Street beat helped along in part by a strong performance from the company's Surface line of convertible computers.




According to Microsoft's official numbers, Surface revenue came in at $926 million, up 38 percent compared to the same time last year. The surge for the quarter ending in September was largely due to a positive mix of premium devices sold, specifically top-tier Surface Book and Surface Pro 4 models.

CEO Satya Nadella during a conference call said Microsoft saw a 70 percent year-over-year increase in commercial deployments of 500 Surface devices or more.

Microsoft's convertible tablet-cum-laptop helped offset a sizable $493 million decline in overall device revenue due to a volume reduction in phone sales. The Windows Phone segment was down $799 million, or 72 percent, year over year as the company pivots away from handsets. Looking ahead, Surface revenue is expected to decline as the latest product versions reach their one year launch anniversary, Nadella said.

As usual, the company did not reveal total unit sales.

Microsoft's strong Surface quarter comes as Apple attempts to reinvigorate interest in its industry leading iPad. During the quarter ending in June, iPad sales continued a steady decline to 10 million units, down 7 percent from a year ago. Revenues were up 9 percent, however, as customers gravitated toward more expensive models in the iPad Pro lineup.

It should be noted that while Microsoft is making upward progress with Surface, Apple is still far ahead in terms of marketshare, unit sales and derived income.

Apple CEO Tim Cook and CFO Luca Maestri are expected to detail the health of iPad when in an investor conference call next Tuesday covering the fourth fiscal quarter of 2016. The earnings call was rescheduled earlier this month to make time for a special media event at which Apple is anticipated to unveil new Mac products.
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Comments

  • Reply 1 of 72
    brakkenbrakken Posts: 676member
    Doom for Apple as Microsoft Retakes Market!

    Just as has been anticipated since the 2009 freeze then meltdown of the global PC monopoly, Apple is finally being handed its hat. Over the next few models, we can expect to see the Surface, which with its m3 CPU can't compete against a Chromebook, let alone the old iPad Air 2, to increase in performance and price. Eventually, Intel may even be able to match its lowest-rung 'mobile' processor with the A10, at which time Apple will finally be defeated!

    Top commenters are now reaffirming the end of Apple's dominance of the mobile computer market, and are waiting for this strong quarter to introduce a new era of non-dashed expectations with full legacy compatibility. Some bloggers are even rallying support for the reintroduction of CD-drives and serial ports in a new Surface-d model.

    The end of Apple is nigh! 
    jude2012baconstangjay-tbadmonklkruppalbegarcjony0cornchipwatto_cobra
  • Reply 2 of 72
    MS still sells a phone?  Who knew.
    jbdragonbrakken
  • Reply 3 of 72
    brakken said:
    Doom for Apple as Microsoft Retakes Market!

    Just as has been anticipated since the 2009 freeze then meltdown of the global PC monopoly, Apple is finally being handed its hat. Over the next few models, we can expect to see the Surface, which with its m3 CPU can't compete against a Chromebook, let alone the old iPad Air 2, to increase in performance and price. Eventually, Intel may even be able to match its lowest-rung 'mobile' processor with the A10, at which time Apple will finally be defeated!

    Top commenters are now reaffirming the end of Apple's dominance of the mobile computer market, and are waiting for this strong quarter to introduce a new era of non-dashed expectations with full legacy compatibility. Some bloggers are even rallying support for the reintroduction of CD-drives and serial ports in a new Surface-d model.

    The end of Apple is nigh! 
    Thought you were serious till 'roundabout "CD-drives", funny stuff.
    monstrosityredgeminipajay-tjahbladeMacPromagman1979albegarcjbdragoncornchip
  • Reply 4 of 72
    canukstormcanukstorm Posts: 1,756member
    70% YoY growth is not too shabby.  At that rate, it won't be long till Surface sales match Mac or iPad sales.
    freshmaker
  • Reply 5 of 72
    canukstormcanukstorm Posts: 1,756member
    Sorry, meant 38% YoY.  70% number is related to commercial deployments.
  • Reply 6 of 72
    Why is the Surface being compared to an iPad? Surface has a full blown OS and as can be seen in the first photo that's a Surface Book which is basically a touchscreen laptop with a keyboard that detaches. People who are buying Surface are not in the market for tablets but laptops. So really they should be compared to sales of other laptops and MacBooks.
    jude2012baconstangravnorodomslprescottirelandwilliamlondonmonstrosityredgeminipajahbladeanantksundaram
  • Reply 7 of 72
    The surface cannibalises the PC market. People who buy an iPad are not buying a surface and vice-versa. Why because it's the difference between iOS and Windows - just because both undertake a tablet form has nothing to do with it.
    baconstangwilliamlondonjahbladecalimagman1979dws-2albegarclostkiwijbdragoncornchip
  • Reply 8 of 72
    38% YoY is very impressive until you look at the size of the market. It's 38% of not a lot. The problem with the Surface is that it's a lousy laptop and a lousy tablet. For the same money you can buy a good laptop and a good tablet. Why bother. All you have to do is look at people using this cumbersome abomination on their lap (or trying to) to realize what a stupid design it is.
    jude2012baconstangwilliamlondonredgeminipabadmonkentropyscalimagman1979albegarclostkiwi
  • Reply 9 of 72
    "According to Microsoft's official numbers, Surface revenue came in at $926 million."

    My back-of-the-envelope calculations assume a retail selling price of $926 per unit. That way, Microsoft's revenue figure translates into one-million Surface units sold: not anywhere near iPad sales, nor iPad Pro sales, either. If average Surface selling price is 25% higher than my assumed $926 figure, then Surface sales fell short of one million units.

    In other news, Apple has sold large numbers of MacBooks and iPads to IBM in recent months, and a large share of those sales were likely attracted away from Microsoft's portable Surface. With Macs compared to PC's, IBM reports spending far less on internal support staff and achieving higher user satisfaction. That's why unit sales of Surface are lagging. A million units sold to diehard fans is easier than selling a second million units to customers without a Windows commitment.
    mark fearingbaconstangwilliamlondonredgeminipachiacalimagman1979albegarcmelodyof1974lostkiwi
  • Reply 10 of 72
    bwinskibwinski Posts: 164member
    Yeah, right. ESPECIALLY, in cities that have pro football teams...  Ask Belichec, he'll let you know where they're hidden.
    badmonkcalimagman1979albegarclostkiwijony0
  • Reply 11 of 72
    "According to Microsoft's official numbers, Surface revenue came in at $926 million."

    My back-of-the-envelope calculations assume a retail selling price of $926 per unit. That way, Microsoft's revenue figure translates into one-million Surface units sold: not anywhere near iPad sales, nor iPad Pro sales, either. If average Surface selling price is 25% higher than my assumed $926 figure, then Surface sales fell short of one million units.

    In other news, Apple has sold large numbers of MacBooks and iPads to IBM in recent months, and a large share of those sales were likely attracted away from Microsoft's portable Surface. With Macs compared to PC's, IBM reports spending far less on internal support staff and achieving higher user satisfaction. That's why unit sales of Surface are lagging. A million units sold to diehard fans is easier than selling a second million units to customers without a Windows commitment.
    That is revenueas in money they made, they sold way more than 1 milliion pieces to make that kind of revenue!
  • Reply 12 of 72
    70% YoY growth is not too shabby.  At that rate, it won't be long till Surface sales match Mac or iPad sales.
    Well, thate had to be some increase in YoY otherwise SatNad would be history. They (MS) have spent an awful lot of money on their 'Could not do that on my Mac' adverts in recent months.
    That said, I have seen only Two Surface Pro's out in the wild. Perhaps I don't go to the right (or wrong) places where the new Hipsters hang out with their MS Machines.
    Yeah, that's probably why. I would not be seen dead using Windows 10 and I ain't ready for my coffin yet.
    williamlondoncalimagman1979
  • Reply 13 of 72
    simply258 said:
    Why is the Surface being compared to an iPad? Surface has a full blown OS and as can be seen in the first photo that's a Surface Book which is basically a touchscreen laptop with a keyboard that detaches. People who are buying Surface are not in the market for tablets but laptops. So really they should be compared to sales of other laptops and MacBooks.
    Agreed. The MS Advertising is all based around what you can do on a Surface and can't do on a Mac not an iPad. Perhaps the hacks think of the Surface is just a tablet?

  • Reply 14 of 72
    "It should be noted that while Microsoft is making upward progress with Surface, Apple is still far ahead in terms of marketshare, unit sales and derived income. "
    Read: "it should be noted that my headline is misleading"
    Rayz2016anantksundaramrandominternetpersoncalimagman1979alandaillostkiwinolamacguymacsince1988cornchip
  • Reply 15 of 72
    But they still haven't fixed the "sleep of death" bug in Surface Pro 4 results No gain on rhe play in a brick of the pad. Microsoft refuses to replace leaving the buyer out their $3,000 

    https://m.reddit.com/r/Surface/comments/4i10sx/surface_pro_4_sleep_of_death/?utm_source=mweb_redirect&compact=false

    https://m.reddit.com/r/Surface/comments/40phxo/surface_pro_4_sleep_of_death/?utm_source=mweb_redirect&compact=false
    calibrakken
  • Reply 16 of 72
    Is that news?

    You mention how many iPads were sold.

    You don't mention how many Surface are sold because you don't know that. 

    You don't know that because Microsoft don't disclose it.

    Yet you don't hesitate to call this "sales boom".

    "70 percent year-over-year increase in commercial deployments of 500 Surface devices or more" is not a number.
    anantksundaramcalimagman1979lostkiwinolamacguybrakkencornchipargonaut
  • Reply 17 of 72
    70% YoY growth is not too shabby.  At that rate, it won't be long till Surface sales match Mac or iPad sales.
    LOL. Percentages are essentially useless for describing sales like this, especially if the initial sales numbers are weak.
    nolamacguyjbdragoncornchip
  • Reply 18 of 72
    appexappex Posts: 687member
    Apple should release a Mac tablet.
    verbatim00Roger_Fingas
  • Reply 19 of 72
    jd_in_sbjd_in_sb Posts: 1,482member
    I'm happy for Microsoft. Phones have been such a disaster, including billions paid for Nokia that went down the drain. Glad something is working even if the volumes are not huge.
  • Reply 20 of 72
    irelandireland Posts: 17,492member
    I sell you 2 pencils this year. I sell you 10 next year. Sales up 500%.
    rob55baconstangslprescottanantksundaramcaliSpamSandwichnolamacguyjbdragonbrakkencornchip
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