Sunday April 30, 2017

Microsoft's Surface Revenue Drops by $285M

Revenue for Microsoft’s Surface hardware has done a deep dive: the latest earnings call has revealed that only $831M was produced this period, compared to last year’s 1.1B. The company blames the lack of new Surface models to drive interest, and how there are a lot of cheaper clones out on the market for people to choose from nowadays. I hope this doesn’t mean they will make future devices less of a premium product.

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"There is competition that is lower-priced," said Carolina Milanesi of Creative Strategies in a Friday interview. "There's not just more of the same, but a lot that are positioned in the same space are cheaper. And there were expectations that we would have seen a [product] refresh that we haven't seen yet." Jack Gold, principal analyst at J. Gold Associates, echoed Milanesi on the age angle. The revenue decline "indicates that the aging product needs a refresh badly," Gold wrote in a note to clients today. "Price cutting and competing vendors' products will continue to create declines until new product is released, rumored for later this year."