Microsoft financials raise doubts over the future of Windows Phone

Microsoft has released its latest set of financial results, with overall revenues falling by 10% year-on-year, but a strong set of figures for its cloud services. However, the good performance of cloud was overshadowed by the continued failure of Windows Phones to get any traction in the market, with only 4.5m devices sold.

This represents a stunning decline of 57% compared to the same quarter last year. Overall phone revenue fared little better, with a 49% year-on-year decline.

There was plenty of good news. The company has now reached the milestone of 200m devices running Windows 10, which in turn is leading to knock-on uplift in other areas: 30% of Bing advertising revenue (which grew 21%) comes from machines running the latest Windows version.

But the highlight was cloud services. Server products and cloud services revenue grew 10%, accounting for currency fluctuations. On the same measure, Azure revenue grew 140%.

All of this is in line with CEO Satya Nadella’s overall strategy of shifting the company more heavily into cloud, and this was reflected by the response of the stock market. Microsoft stock went up by about 3% in after-hours trading.

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