Microsoft has announced its earnings for its second fiscal quarter of 2015 ending on December 31 just recently, and one particular area has sparked our interest as it has now officially become one of the many billion dollar businesses Microsoft has. This business that we’re talking about pertains to the Surface line of devices as it has generated $1.1 billion in revenue for the quarter largely driven by strong demand of Surface Pro 3 and its accessories.
This $1.1 billion the Surface line generated is up 24% compared to the previous quarter where revenue was just north of $900 million, and although the software giant didn’t disclose sales numbers, the fact that sales are increasing is an important achievement for the company.
The Surface has achieved it’s goal
Microsoft’s decision to get into the hardware space with Surface devices was a bold move for the company, and was done largely due to the fact that PC OEMs were creating lackluster hardware and Microsoft was not able to convince them to change and make devices that pushed the boundaries in hardware design. Microsoft’s shareholders were not supportive of this decision early on, especially as Microsoft took a $900 million write-down early on in the life cycle of the original Surface RT.
Microsoft’s goal with the Surface line was to create an aspirational device giving OEMs a reference point in hardware design and offer a clean Windows user experience. This decision was met with a lot of backlash from some OEMs which have since started and continually support the Chromebook.
However, when we fast forward to today and look at the devices available in the market and ones that will make their way soon, shows us that Microsoft did in fact inspire OEMs to create bold designs and push into the frontier of hybrid PCs. There are now plenty of form factors to choose from, with new thin and light Ultrabook form factors, PCs that have rotating screens, screens that detach, and even ones that bend all the way back.
OEMs have embraced the change, and Surface is leading the way, and the fact that it’s generating more revenue for Microsoft and proving to be a successful viable business model is a sign of good things to come, especially as Windows 10 is set to arrive.