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There hasn’t been a lot of good news about Windows 8 or Surface tablets over the past two years.
But earlier this week, things changed: Microsoft posted record revenues and a surprising chunk of that revenue came from the Surface division.
Microsoft has launched an aggressive advertising campaign for its Surface Pro 3, calling it a tablet that can replace your laptop. Microsoft has paid hundreds of millions of dollars for key advertising spots on NFL and popular TV shows.
The good news for Microsoft is that all that advertising appears to have paid off: Microsoft Surface sales have doubled in the past year.
That’s significant. To put that number in perspective, Microsoft reported Surface revenue of $908 million in its first (fiscal) quarter of 2015. One year ago, Microsoft’s Surface revenue was around $400 million.
Overall revenue for Microsoft was $23.20 billion with an operating income of $5.84 billion. That quarter ended on September 30, 2014.
Not bad for Satya Nadella’s first year at the helm.
Nokia still losing money
Most of Microsoft’s divisions continue to “execute” well, as stock analysts are saying. The one division that posted large losses, however, was Nokia. Microsoft paid $7.2 billion for Nokia back in April.
Over the past few months, Nokia has posted $2.6 billion in sales while also costing Microsoft $1.14 billion in severance packages and “other restructuring costs.” Microsoft anticipates another $500 million in such costs over the next quarter – which will actually bring the total pretty close to the amount Microsoft predicted when they first acquired Nokia.
When Microsoft first announced its Surface tablets, it had no idea how to market the new devices. Plus, all the negative publicity surrounding Windows 8 certainly didn’t help. Then there was the massive confusion between Windows RT and Windows 8, and the fact that the Surface and Surface Pro were two drastically different tablets (the Surface was pretty bad).
Clearly, things have changed for the better for Microsoft. Third time’s the charm?