14 DAY TRIAL // Microsoft’s Windows Phone revenues dropped 49 percent in the second quarter of fiscal year 2016, but the company claims it’s all happening because of its new mobile strategy announced in mid-2015.
Under this new strategy, the software giant wants to focus on just three different phone categories, namely value, mid-range, and flagships, while also overhauling Windows 10 Mobile based on consumer feedback.
And yet, this new strategy caused one of the biggest drops ever experienced by Windows Phone, with the company selling only 4.5 million phones during the quarter, down from 10.5 million units in the same quarter of the previous year, which represents a drop of no less than 57 percent. But compare Microsoft’s figures to those of Android and iOS, and it gets worse.
Overall, Microsoft has sold a total of 110 million Windows phones since their launch while Android and iOS have combined sales of no more, no less than 4.5 billion units.
Microsoft’s CEO Satya Nadella doesn’t expect the phone drop to end here. “For phone, we expect similar year over year revenue declines, and the gross margin percentage for Q3 should look similar to Q2,” he said in the conference call with investors following the earnings report.
At the same time, the Surface division, which was so often criticized by analysts, experts, and users, managed to improve by 29 percent during the quarter, as the new devices, including the Surface Pro 4 and the Surface Book, sold like hot cakes during the quarter.
Windows Phone down, Surface up
So Windows Phone down, Surface up. What’s the next thing Microsoft should do? Launch the Surface Phone.
The rumored Surface Phone is expected to be a real premium device that would be developed by the same division working on the Surface. Under the guidance of Panos Panay, the man who has always believed in Surface and who actually managed to make this device a hit, the Surface Phone could become the Windows 10 Mobile life-saver and not necessarily make Microsoft successful in the mobile business, but at least keep it on the floating line.
The Surface Phone could come with the same top-notch quality of the Surface tablets and with features that would really give users a reason to migrate from Android and iOS to Windows. People close to the matter have suggested that the Surface Phone could introduce Win32 app support for Continuum, thus making it possible to work on a phone just like you do on a PC.
Rumor has it that work on the Surface Phone is already underway behind closed doors, but little is known so far. But if it’s real, expect it to launch in the second half of this year. And for Microsoft’s sake, it’d better be.