14 DAY TRIAL // After so many years of growth, Microsoft’s Surface started declining, with the latest quarter bringing a drop in revenue, mostly because no new devices were launched.
Microsoft revealed in the earnings reports for the third quarter of fiscal year 2017 that Surface revenue declined 26 percent, with the company itself citing the end of product life as one of the main reasons.
“This quarter our Surface results fell short of expectations impacted by the end of product life cycle and increased price competition. We continue to innovate and invest in creating new computers and computing experiences. Surface Pro; Book; Hub; Studio and HoloLens are all creating new markets for the Windows ecosystem and pushing differentiation with new natural user interface capabilities - ink, vision, voice, touch and mixed reality,” Microsoft CEO Satya Nadella said.
New Surface models coming this year
Microsoft launched the Surface lineup in 2012 when it unveiled the very first 2-in-1 device. The original Surface RT, powered by Windows RT, ended up being just a failed experiment, but as the Surface series evolved and reached maturity, the device turned out pretty successful, with sales growing every quarter.
Furthermore, the Surface category expanded with other models, including the Surface Book laptop and the Surface Studio all-in-one PC, with the latter launched last October.
As far as the decline that Microsoft revealed in its earning reports is concerned, it’s mostly the result of the lack of product launches, as the company was originally expected to take the wraps off the Surface Pro 5 and the Surface Book 2 in the fall of 2016.
Both new generations were then said to launch in the spring of this year, but the company is reportedly holding them back a little longer, mostly because certain features are not yet ready.
The Surface Book 2 and the Surface Pro 5 are now both expected to go live in the fall, and this means that Microsoft should record dropping revenue the next quarter as well, with the company admitting in the call with financial analysts that a decline is indeed likely.
“With Surface, we expect a more moderate rate of decline, given the prior year comparable and current market dynamics,” the company said.