Microsoft Surface sales rise 50 per cent year on year

By John Leonard
25 Apr 2014 View Comments
Microsoft Surface 2 with 4G

Revenues from Microsoft's flagship tablet, the Surface, rose by 50 per cent compared with the same period last year to $500m (£300m), but were down from the figure for the previous quarter (which included the Christmas period) when Surface sales reached $893m, and represented only a modest rise on the Q1 figure of $400m (£238m).

These figures were released by Microsoft in an earnings report for the quarter ending 31 March 2014.

Further reading

The past year has seen the replacement of the unsuccessful Surface RT with the Surface 2 and the original Surface Pro with the Surface 2 Pro in October last year, and also the launch of Windows 8.1 around the same time. Windows volume licencing grew by 11 per cent.

Larger rises in revenue were reported for Microsoft's cloud-based products with Azure pulling in a 150 per cent increase and Office 365 figures growing by 100 per cent. Redmond claims that Office 365 Home now has 4.4 million subscribers, an increase of one million over the quarter.

"We saw strong momentum in cloud services. Our commercial cloud business more than doubled year-over-year, with Office 365 and Azure both performing extremely well," said CEO Satya Nadella on an earnings call.

"Office 365 is now on an annual revenue run rate of $2.5bn, and Azure revenue grew over 150 per cent, driven by both new customers and increased usage," added Amy Hood, corporate vice president and CFO.

Meanwhile the Xbox One sold 1.2 million consoles, and Xbox 360 sold 0.8 million consoles, driving Xbox platform revenue growth of 45 per cent.

Notable by their absense in the release were any figures for Windows Phone sales. Microsoft's acquisition of Nokia's devices and services business is to close this week, after the company finally cleared regulatory hurdles.

Overall, the company's revenues amount to $20.40bn (£12.15bn) for the quarter ended March 31, 2014, giving a net income of $5.66bn (£3.37bn). This represents a slight revenue decline of 0.4 per cent from the same period last year, with net income decreasing 6.6 per cent.

"This quarter's results demonstrate the strength of our business, as well as the opportunities we see in a mobile-first, cloud-first world. We are making good progress in our consumer services like Bing and Office 365 Home, and our commercial customers continue to embrace our cloud solutions. Both position us well for long-term growth. We are focused on executing rapidly and delivering bold, innovative products that people love to use," Nadella said in a press release.

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