Microsoft fans have yearned for modern and compact computing equipment after the advent of its Surface device. A lot of rumours and speculations have been making rounds on the internet regarding whether the Redmond Company will release any Surface product anymore or not. Microsoft Corporation (NASDAQ:MSFT) has made it official in its fiscal third quarter results that a new Surface hardware is likely to arrive this year.
Microsoft, in its Q3 FY 2018 earnings report that came on Thursday, said that the Surface business has shown strong $263 million or 32% YoY growth, and clocked an overall $1.09 billion in revenue. The company expects the number to grow even higher in its fiscal fourth quarter with its updated portfolio of new Surface hardware. This is the third consecutive quarter when Surface hardware sales accounted for billion dollar revenue.
Amy Hood, executive VP and Chief Financial Officer at Microsoft, said, “We expect Surface revenue growth in the high teens as we continue to transition to the latest products in our portfolio”. Also, the company saw better than expected performance from its Surface Book.
A New Surface Device
Microsoft has been improvising on the surface lineup since the launch of its first Surface Tablet in 2012. Surface Pro was introduced following year in 2013. Also, the Surface device has heralded Microsoft’s entry into the PC market. The Surface devices wreak futuristic technology and top-level craftsmanship. Microsoft claims that its new Surface Pro offers enormous battery life of up to 13.5 hours and is 2X faster than the Macbook.
The company continues to dominate in its business-centric offerings like its Cloud-based client Azure, Dynamics 365 – CRM and ERP capable business application, Office 365, and LinkedIn. Though there are some caveats in the company’s MPC (More Personal Computing) segment which includes – Bing, Windows 10, Surface devices, Xbox and Windows Phone. Lately, Microsoft’s gaming business has shown impressive growth due to its Xbox.
For a while, Microsoft is investing heavily in its MPC segment. Its perfectly logical as the Windows Phone is almost dead and sales of Surface devices have been noted to drop in the past. In Q4 FY 2017, Surface revenue declined $82 million or 2%, due to the reduction in volumes sold. On the other hand, phone revenue dropped a whopping $2.8 billion. In Q3 FY17, Surface revenue dipped by 26% or $285 million. Additionally, in FY18 Q2 and Q1, Surface devices recorded a revenue growth of 1% and 12%, respectively.
The Windows maker managed to kick-off the modern 2 in 1 detachable tablet segment with its Surface device but it needs to maintain the momentum of its upcoming Surface devices for substantial results. The next Surface lineup can include Surface Pro 5, Surface Studio 2, or a Surface Book 2. The clouds surrounding Microsoft’s Surface phone hasn’t cleared but at this point its unclear as to when we will be seeing a Surface Phone. May 7, 2018, the day Microsoft’s BUILD developers conference begin, can be the potential time and place for the company to reveal its new Surface devices. The reports suggest clearly suggest that Microsoft is visualizing the future world beyond Windows, and with its Surface devices it can be a formidable opponent in the advanced computing industry.