Killing the Surface Mini hit revenues, Microsoft reveals

Jane McCallion Read more July 23, 2014

The Surface Pro 3 is Microsoft’s most successful tablet to date, but it wasn’t enough to stop revenues sliding thanks in part to the late cancellation of the Surface Mini.

Killing the Surface Mini hit revenues, Microsoft reveals

In Microsoft’s results for the most recent quarter, CFO Amy Hood said that “while it’s still early, sales are outpacing earlier versions of the Surface Pro”, according to a transcript from Seeking Alpha.

She added the organisation is “excited” about extending availability to new markets this summer.

Despite this bullishness, revenue generated by the Surface family was actually down nearly $100 million quarter on quarter, from $500 million to $409 million.

The company blamed this dent on “Surface inventory adjustments”, caused partly by “a decision to not ship a new form factor”.

This is the first time the company has officially acknowledged it was preparing to ship a different sized Surface tablet, widely reported at the time to be a smaller “Surface Pro Mini”.

That a smaller device was in production was strongly indicated in the run up to the launch of the Surface Pro 3, however reports suggested it was dropped at the last moment as it “wouldn’t be a hit”.

Nokia sales

Microsoft’s results also revealed the impact of Nokia devices on phone sales following the company’s acquisition of the device maker.

Despite selling only 5.8 million Lumia smartphones, 29.4 million fewer units than the iPhone over the same period, Microsoft actually sold 900,000 more phones overall than Apple.

How can this be? It’s thanks to the strong performance of its feature phone and Nokia X Android devices, which sold 30.3 million units combined.

Despite this, the company announced last week it will be killing off the Nokia X division, although “select” product designs will be incorporated into the Lumia range.

Overall, CEO Satya Nadella said he was “proud of the results”, repeating his “mobile first, cloud first” mantra – picking out the commercial cloud unit, which raised $4.4 billion over the course of the 2014 fiscal year, for particular praise.