Microsoft is releasing their Q2 Fiscal Year 2015 results, and the numbers are quite good, despite some ominous decreases in revenue (due to sales or acquisitions).
The Surface line has officially crossed the billion dollar mark for revenue demonstrating a 24% growth from the previous quarter. In other words, the big holiday season looks to have been successful in pushing the Surface Pro 3, which drove the growth, into more hands than ever.
The Surface line of tablets that can replace a PC has been criticized since its inception as being a money-losing venture. However, Microsoft looks to be finally making some headway with the Surface Pro 3, which has been well received by critics and increasingly consumers.
The increase in revenue to $1.1 billion in an increase from last quarter's $908 million. Although the increase is not massive, it does show that the Surface still has some legs.
Now that Microsoft is pulling in over a billion in revenue (not profit, mind you), it may be harder for the voices to proclaim that the Surface is a failure. Alternatively, had Microsoft seen stable sales or even a decrease, the story would be very different.
Source: Microsoft
Reader comments
Surface pulls in over one billion in revenue for Microsoft as sales increase by 24%
Folks the current Surface 3 Tablet /Laptop Hybrid dropped 100 $$. it looks like the new Microsoft "Surfaces with the Fanless M class broadwell CPU"s are about to be put in the market place for sale. Also folks since the Microsoft Windows Rt OS Surface 2 and Nokia Lumia 2520 are no longer being manufactured look for a new Microsoft cheaper Intel "Atom CPU" Surface tablet to go on sale in the market place to replace the discontinued Surface 2 and Nokia lumia 2520 RT OS tablets which were microsoft's cheapest Tablets.
Surface Pro 3 + Lumia good combination?
Do you hear that. It's the sound of the death knell for Apple. It's faint now, but its slowly getting louder.
The only problem with Surface pro 3 is its price! It is expensive!
I said once and i will say it again Microsoft needs to sell a 300 o 450 dollar "Surface" tablet that uses an Intel Atom CPU because their Surface Pro line of Tablets cost too much for a lot of folks to buy. MS could use the Staff they got from Nokia to design a nice thin Polycarbonate plastic body for this new "Atom Surface tablet" that will have the 1080p HD 10 inch screen sreen fron the Surface Pro 2. People would buy em up as fast as they came out for sale if they are designed to look like a Surface Pro 3 and have the back handy Surface pro 3 kickstand and ect.
I agree!and I don't want those SSD memories! Just 500GB cheap hard drive!But I need N-trig and the keyboard should be optional
Are you seriously asking for a HDD in place of an SSD?
I know that SSD is much better than HDD,but when SSD is expensive and I need a Surface pro,what should I want?In Iran I have to pay 7 million tomans for a surface pro 3!many people cant afford it!
Sadly, I have no money for sp3
I see a Daniel in the picture!
It shows that people needs good products. This surface 3 has almost every feature that users want
Got mine! Waiting for the SP4! At least for my wife.
The Surface Pro 3 is a winner. It will be seen as the turning point for Microsoft's hardware division. It took some time to get consumers on board, but the successful advertising blitz, coupled with the fact that it's a useful and innovative product, seems to have worked. I expect the Surface Pro 4, launching alongside Windows 10, to be a huge hit for Microsoft.
Excellent!! Owner of SP3 since launch!
I would buy a surface if they didn't cost to much.
"well received by critics..." And rows of MBAs at the January 21 event. Critics a bunch of hypocrites. At the end they all go back to their MBAs. Consumers I'll believe 99%!
Welcome to tech on the internet. Where 90% of the journalists are raging Apple fanboys who refuse to admit that something is better than the Apple equivalent.
"raging..." Lolz!
I don't know anything about MBAs, but what makes it a sought out device for hypocritical critics?
I've bought the Surface Pro 3 yesterday. Replaced my Surface RT. Microsoft grabbed my $1300. It's mostly for my wife anyways. I'll just use our 10 year old PC (very light user)
Surface 4 will make or break you. Stop the exodus from Windows! Pull out all the stops!
I never had a "serious" tablet or notebook in the past, now I love my sp3 and I think I will replace it with new models in the future, hopefully for years.
My SP3 was the best decision I've made when it comes to a tablet. Because of how much I used it my VP bought one and more in my organization are interested. I use it for everything and it has contributed to why I am starting my own business.
The growth is indeed the key metric this time around. As the popular Surface Pro 3 continues to be sold the profit margin should increase slightly due to scale. Add in the inevitable discount that will happen whenever the Surface Pro 4 is announced and the much better initially received Windows 10 preview and the Surface Pro lineup looks to be what I thought it would. A strong, premium hardware line that provides Microsoft with terrific profit margins.
Inevitable discount of maybe $50 off.
I love my Surface Pro 3! Use it for note taking at work and all personal computing needs. Perfect for Netflix in the bed at night. Also, I have the docking station and a 30 inch Dell monitor for real work - it is my desktop as well as my laptop and tablet!
You should get one now...
I might work here, but I'm not lying when I say the Surface Pro 3 is the best tablet device I've ever owned. And I've owned or used plenty of them. I always wanted to be productive with a tablet, else it felt like just a big phone.
This is the first one I've been truly productive with. That makes it indispensible.
Your claim is 100% accurate. You can't argue the fact that it is the best tablet device. I know former Mac owners and iPad owners who bought it, and love the device. Their opinions say the loudest message when they ditch mother Apple for it.
Posted from the Z3, Nexus 5, or Surface Pro 3
Oh, and it's AMAZING on a plane. Seeing people struggle with Ultrabooks in their seat while I just popped the stand out on the SP3, immense.
"Mother Apple!" Hilarious...... I like the term.
True.
I wasn't inclined to get the SP3 after the problems I had with the Surface RT but I'm glad I picked one up in Redmond and brought it over even before sales in Europe started. It's been particularly useful for Academic purposes (all my PhD papers have been written in it).
Food job Microsoft
Laughed too hard on this!
And its not even being sold in the UAE. I haven't seen a surface displayed in any of the major electronics store in Dubai.
Q2 2015?! Numbers for the future? Or something i dont understand here. We still have Q1 2015 :D
Love my SP3. Looking forward to a replacement for my L920 & W10 rocks.
My Lumia 928 is due for an upgrade in May 2015. I'll probably stick it out and see how she performs running Windows 10. I'll remain on Verizon, but certainly will not commit to a contract. I refuse to get caught up in that web again. I find that customer service responds favorably whenever im not locked onto the carrier. All customers are valuable, however, special attention is focused on those consumers who can leave at will. That is just my take on it.
Can't wait to get one sometime this year.
How much was that surface write-off last year?
I want a Surface Hub!!!
Me too. I'm gonna use it as a TV and forget that it's actually used for business and stuff.
Happy to admit I contributed to this revenue by purchasing a new Surface 2 over the holidays. Very happy with it so far and even if it does not get all the Windows 10 features, it's still a great little device.
And now might be the perfect time for MS to introduce a Surface phone since the Surface name is becoming popular. Think 5.5" or 6" flagship Surface device running Windows 10 preloaded, a stylus to compete with all the Note phones, and maybe a built in kickstand and a small detachable type cover for widescreen viewing.
With the Lumia optics I would buy 3 immediately
I would buy a surface phone instantaneously! I agree the Surface brand is gaining momentum and recognition. I would actually prefer a Surface phone over a Lumia as far as branding goes.
Oh man! I can't wait till I'm able to buy a surface pro 3 myself!
I was lucky enough to get one for Christmas! 128 gb i5. School starts on Wednesday. Excited to give her a go!
I envy you!
Surface is dominate world
I've got Windows 10 running on my SP3 and haven't looked back. Best purchase I've made in quite some time. I'd encourage anyone who's in the market for hardware to give it a whirl. I'm a developer and gamer so I put it to the test daily and I can do everything I need on this device with no issues. If I wasn't such a tech nerd I'd sell my desktop and just use this. If anyone is looking for "one device to rule them all" though I can assure you that this will satisfy your needs.
I'm curious to know what games you run on it? What configuration is your surface?
Posted from the Z3, Nexus 5, or Surface Pro 3
I have the 1.7ghz i7 w/ 512gb ssd. So far I've played Counterstrike, Battlefield 4, Bioshock Infinite and Dragon Age Inquisition on it. I didn't fiddle with any settings yet so it used the default resolution. There's some occasional lag but all things considered they all ran well. If you're a heavy gamer I'm not sure what kind of wear daily use would put on an sp3 but a hardcore gamer would most likely have more than a hybrid device to suit their needs.
That's pretty darn good to run even on default settings. Didn't know it was capable. Thanks for the info!
Posted from the Z3, Nexus 5, or Surface Pro 3
No problem man. You should stop in an MS store and try one out.
How's the battery? Does it heat fast and how long the battery lasts while gaming?
I'm getting a retina MacBook pro and installing windows 10 on it
Posted via the Windows Central App for Android on my Oneplus One
Or you could just get a Dell XPS 13....
Posted from the Z3, Nexus 5, or Surface Pro 3
Sorry to point this out, but there is a typo at the end where I think its supposed to say "alternatively", not ALtentatively
Sold the most Lumia's to date, guess they didnt need that flagship.... :)
Fantastic!
I guess it would make more money if it was actually more available outside of US...
An affordable surface with w10 would be nice.
Indeed!
They should introduce a Microsoft Lumia 2530 with Intel Atom and Windows 10 for $499. That would sell like crazy.
I might be getting a flagship Windows 10 phone and a Windows 10 Surface later this year :)
That's great, looking forward to getting the Windows 10 Surface as soon as it's available.
Nice.im gonna get one soon. :) can't wait
I sure hope W10 helps all windows devices increase market share.... I'm quite positive it will.
And more Lumias sold, that's nice to know.
Hope the Pro 4 will be on the market before the iPad 'Pro', or else Surface sales could suffer.
The iPad Pro is not a threat to the Surface line, the iPad is just what the name states. It still has an A8 chip(rumored) so it's not a tablet with an computer OS and Apple aren't really known for making productive devices but rather entertainment devices.
This new iPad is just a regular iPad with a bigger screen and some improvements to the OS, noone should be suprised really since that is all the "innovation" Apple can create.
Well, no one really knows what the iPad Pro is yet. It could be running a touch-optimized version of Mac OS, in which case it could be a productive device.
'Touch' and 'productive' don't really go in pair. I'd rather expect a hybrid with detachable (and optional) keyboard, than pure tablet. But then again, it would still need USB to be actually usable, and Apple doesn't seem to be keen on the idea on smaller devices.
Sure, that is true and alot of people will buy it just because it has an Apple logo on it but i don't believe it will slow the sales down of the Surface line noticeably. The Surface line has gained so much trust and respect as the best possible choice for productivity on the go and more. Apple has their heard of followers but don't forget that Microsoft is making huge moves and most importantly gains in marketshare and customer respect.
The compatition will catch up to the Surface Pro 3 but by then Microsoft has released Windows 10 and surely a new Surface Pro 4. Don't forget, compatition is good in any market and Apple making their iPad Pro is only gonna make the Surface Pro 4 better.
Apple have already been ridiculing Microsoft for putting full Windows on tablets. It'd be a pretty big 180 to do that themselves, especially as they're already trying to make people forget that Jobs famously said 'Anyone who releases a touch device with a stylus has already failed'.
Not to say it will happen, but remember, Blackberry lauged at Apple for on-screen keyboards in iOS.
Tell that to the millions of blind apple fans. I can already tell that this new iPad will sell more than the Surface Pro 3. Still hoping they come out with a Surface Pro 4 with Intel Core M as the base model and cheaper price. Or maybe even an Intel Atom.
Let's stay away from Core M, if possible. An atom based Surface 4 would be great, along with a Broadwell-U SP4. That would drive sales way up, imo, even with a starting price of $599.
Theyres plenty of blind MS fanboys too man. Really, can we not get into this fanboy garbage?
lol, seriously? were using the tired old "apple cant innovate" line?
It's not that they can't, it's that they don't.
No one in their right mind will buy an ipad over a Surface Pro just because the former has a bigger screen.
Obviously, but we don't know what the iPad Pro will be capable of yet.
The numbers say otherwise..... Lol, are you serious❓
.........
⬆ that right there is how the term "blind Fanboism" came about....
What numbers are you referring to? The one where the Surface is gaining revenue or the one where the iPad is going down in double digit sales every quarter? Seriously, I'm curious.
Even if the iPad is declining, it's still selling 10s of millions more units than the surface. That's 10s of million of people choosing the iPad over the surface
Yeah, but to these stubborn, and unrealistic, MS fans those numbers mean nothing...
Until they go down below surface sales that point is irrelevant.... SMH.. You continually prove yourself to be a blind fanboi... Really❓
Hey, Jas... How old are you? Honest question.. It might give me some perspective, and understanding, about you, so that we can come to common terms..
Not that I don't agree with you, but the iPad continues to be the wrong comparison to make with the SP3/4.
"Nobody in their right mind would buy an iPad over a Surface for productivity" might be a better statement. Obviously the iPad is going to sell more devices as a cheaper, more accessible, content consumption device.
Macs on the other hand? I think Apple makes 5.5 billion in revenue on macs as of Q3 2014. (So a little out of date, it's sure to have gone up). We don't know what % of that is the macbook air, but I'd suppose it isn't more than half. So with the Surface getting something like a 23% increase in revenue, it's fast approaching Macbook Air levels of revenue, and that's only for Microsoft's line; that alone speaks well about ultrabooks in general.
i really hope ipad pro doesnt have an attachment keyboard. apple cannot chip away sales of surface. its fucking annoying.
As long as it's an iPad and not a "MacPad" it cannot beat any Surface! ;)
But, who says that they aren't planning to put Mac OS on a iPad form factor?.... Has Apple ever been known to use others ideas?❓❓❓
I remember when Apple said "I think our competitors are confused" Maybe they'll bite their tongues and give in to the hybrid
I have never found anything useful or productive with my iPad air. Everything about it just sucks. Multitasking is a drag. Not intuitive like the new windows. Everything is done with the home and onscreen back button. Stupid! Also, I found that office and OneDrive on the iPad to be cumbersome as well. You're all jealous with those updates on other systems before windows but believe me, they're nothing special. They don't work well or any better than on windows. By the way, I just use my iPad to play casino slots. That's how useful it is.
Preach!
Still wish we had net profit or losses to know how it's really doing. That'll tell us a lot more about the state of Surface than revenue.
Still, growth is growth.
The early losses with Surface were all on RT inventory that was being marked down. No such problem worth Surface Pro 3.
What's your source?
It was widely reported from Mary Jo Foley to the WSJ, do your research.
Foley doesn't have access to any inside information, she's a journalist. Microsoft made big losses on the original surface, it didn't sell as well as expected, this is common knowledge as Microsoft shared the information. To state that it was ALL because of RT is interesting but not true. Prove me wrong if you can by providing a link to any site showing this as a fact (and not opinion or speculation)
Well, if you want to be pedantic (and I have no problem with that :-) ), you don't know that it's not true. :-) How about this then, Surface RT units were cleared out at prices substantially less than their original MSRP than other modes of Surface, and were sold in much greater volume than other models of Surface (as strongly indicated by companies doing market analysis of Windows SKUs seen in the wild). Therefore we can deduce that it was likely substantially responsible for the loss.
I wasn't being pedantic, I just asked your source. As expected, your statement of fact was your deduction and is probably incorrect as MS expected the Surface Pro to sell more and their lack of sales would probably contributed to the loss, although we don't know, but that doesn't mean we need to make up our own incorrect statements and pass them off as facts
I suggested you were being pedantic as a positive. :-)
Fair enough that I don't have access to Microsoft's financial statements and should have used a qualifier.
I'm curious, do you have access to them? I'm curious because you said "To state that it was ALL because of RT is interesting but not true."
To state so definitively, without qualifiers, that it's absolutely not true, presumably you have a source? Or is that also speculation stated as fact?
Microsoft has only recently started making profit on the Surface Pro line (according to the information they've published). By definition, it means that they didn't make profit on them before... QED
It is easier to say someone is wrong, instead of give a useful thought about it.... because if we follow your thinking, no one is never going to be correct because companies never say all the truth about their profit.
I'm disappointed with the number of people who make statements as if they're facts without having any substance to back them up, it makes them look like retards...
A) The word "retards" is pretty insensitive to people with developmental disabilities. Stay classy.
B) You made a statement of your own that I pointed out was unsupported and lacked any qualifiers and you've simply not bothered to reply. Stay classy.
C) I acknowledged that you were right that I should have used a qualifier, but received more backhanded comments from you in reply. Stay classy.
One source is the article we're all commenting on. You'll note that the graphic states that the shift to Surface Pro 3 drove gross margin improvement.
If that were true, you would expect Microsoft to brag about how much money they're pulling in from Surface, no? Something tells me Surface is really close to making a net profit, but not quite yet.
Why would they brag about that?? What you think this is kindergarten? This is a billion freaking dollar company that doesn't need to brag.
Lol ok, if you say so. After all, it's not like they need to calm investors who might think that they are losing a lot of money on the Surface division. I wish I was as smart as you.
Well, apparently they aren't losing money on the Surface devision ;)
@Jsa00555 Investors aren't looking at each line item (they aren't kids like you) they "might" get down to the level of business unit performance, which in this is all viewable in the complete finanical statement on the link at the end of the article.
If you compare Q12013 to Q2015 (the verge has a nice graph on their story) you can see slow steady growth of MS revnue and profit. Thats what investors look at, not some kind of per product fanboism. You do realise MS has hundreds of products and hundreds of services?
Montpbm isnt being a smart a** he is just pointing out you need to read and learn a bit more to understand the context of these numbers and investing as a whole rather than making silly childish statements that a) aren't true and b) sound a little silly. Not being mean, but its a case of knowing about something before typing about it and making sweeping statements.
Ha ha, lol. Microsoft don't need to attract investors. That's like saying Angelina Jolie needs to attract men. Or dung needs to attract flies. Microsoft has enough surplus cash they could probably start their own space program. Most of their income comes from the commercial side of it all. The general public stuff is all toys and playthings.
(Multi billion dollar company:)
The Surface started making a profit in FY15 Q1. In FY15 Q2 it has become even more profitable, according to Business Insider: "Microsoft also told us that the product is now respectably profitable, compared with being barely profitable (for the first time) last quarter."
Not actual numbers, as you'd have liked, but at least it's confirmation from Microsoft that it is indeed profitable, assuming Business Insider is reputable.