Microsoft just had a successful event just very recently. From that event there are plenty of excitement on what is next for Microsoft. From the event as well we at techENT are expecting great things from Microsoft; wearables, new smartphones and probably the best Windows in years. It seems also that not only that Microsoft did well and impress in the event, they impressed everyone with their financial figures too the last quarter of last year.
In Quarter three Microsoft is able to rack up a revenue of US$26.5 billion. What is interesting to note in this report is that US$1.1 billion of this revenue comes from the sales of the Surface devices. According to reports, the Surface Pro 3 and some accessories contribute to 24% of the Surface sales. We presume that the rest of the Surface sales were the contribution of the Surface 2 sales. Lumia also takes the limelight here when they reported that 10.5 million units were sold world wide with a total revenue of US$2.3 billion for the fourth quarter of 2014. They added that the growth of the Lumia is due to the rise in the middle income sector and their affordable smartphone. Another thing that shows significant growth is their Cloud offerings to their commercial side; growth of 114%.
In total Microsoft actually grew in the 2014 fourth quarter in between 5-8%. But where did they lose? The answer is Windows. In fact consumer licensing of Windows declined by 13% and they cite that this is due to the ending of Windows XP support and more licensing to educational institutions.
Of course there is another thing that Microsoft would lose very near in the future. The Surface Pro 3 recipe has been a proven recipe. The results speak for itself; it sold three times more than its predecessor, the Surface 2. So the only sensible thing to do here for Microsoft is to focus on the marketing and the production of the Surface Pro 3 correct? That is what Microsoft is actually planning to do according to a recent report. According to the report Microsoft is ending the production of the Surface 2 and will shift all its tablet productions to the Surface Pro 3 instead.
Launched in 2013, the Surface 2 was supposed to replace the Surface RT but did not hit the right spots with consumers in general. Even developers shy away from the Surface 2 platform due to its small market. This hurts the sales even further. The end result, a humongous amount of unsold inventory piling up in Microsoft’s stores. The inventory costed Microsoft for a while actually. On the recent Windows 10 event also the Surface 2 was not on the list of the new software upgrade making it even more unreasonable for Microsoft to keep producing the failing tablet. Therefore they discontinue it. However those who are still looking to buy a Surface 2 still can do so due to the amount of unsold goods in Microsoft stores. You may find a few stores keeping some Surface 2 devices in Malaysia as well if you know where to look. For all you know they might just put it up at a tremendous price cut. So watch out everyone!