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Microsoft Now Makes Money From Surface Line, Q1 Sales Reach Almost $1 Billion

Posted by timothy on from the but-that's-just-on-the-surface dept.

SmartAboutThings writes Microsoft has recently published its Q1 fiscal 2015 earnings report, disclosing that it has made $4.5 billion in net income on $23.20 billion in revenue. According to the report, revenue has increased by $4.67 billion, compared to $18.53 billion from the same period last year. However, net income has decreased 14 percent compared to last year's $5.24 billion mainly because of the $1.14 billion cost associated with the integration and restructuring expenses related to the Nokia acquisition.

But what's finally good news for the company is that the Surface gross margin was positive this quarter, which means the company finally starts making money on Surface sales. Microsoft didn't yet reveal Surface sales, but we know that Surface revenue was $908 million this quarter, up a massive 127 percent from the $400 million this time last year. However, if we assume that the average spent amount on the purchase of this year's Surface Pro 3 was around $1000, then we have less than 1 million units sold, which isn't that impressive, but it's a good start.

11 of 117 comments (clear)

  1. Did they make money on Surface? by Anonymous Coward · · Score: 4, Interesting

    A positive "gross margin" (revenue - direct costs > 0) sounds like a nice way of saying that they made a loss (revenue - direct costs - indirect costs < 0).

    1. Re: Did they make money on Surface? by _xeno_ · · Score: 4, Informative

      I'm not sure the Surface Pro line is really competing with the iPad, though. I mean, according to Microsoft themselves, a Surface Pro 3 is equivalent to a MacBook Air.

      (Disclaimer: I own a Surface Pro 3. They're probably right to compare it to the MacBook Air and not the iPad. I know everyone hates the "tablet UI" on the desktop but even with the Surface Pro 3 their tablet UI is still pretty terrible. I pretty much never leave the desktop. On my tablet. The few tablet-style apps I've tried for the Surface has all been terrible. It really does make a descent small Windows laptop, though!)

      --
      You are in a maze of twisty little relative jumps, all alike.
    2. Re: Did they make money on Surface? by PopeRatzo · · Score: 4, Funny

      Of course he's looking for bad news. Have you read the comments for any Slashdot article that mentions the Surface or Surface Pro? A brigade of people come out who are basically upset that it even exists. It's like the Surface Pro scared their mothers when they were in the womb.

      --
      You are welcome on my lawn.
    3. Re: Did they make money on Surface? by PopeRatzo · · Score: 5, Interesting

      I own a Surface Pro 2 and a Surface Pro 3, and use them for portable music production, live performance and field recording. They are by far the best system for such use. It's a tablet, with the touch screen (or stylus) except it can run a full version of ProTools with all the plug-ins and VSTi's you could possibly want. Full USB connectivity for audio interfaces, MIDI controllers and peripherals.

      If they made a Macbook with a removable touchscreen, it would be close, but Apple seems more intent on having every pixel in the world. I remember when Apple really catered to musicians (except for their slow adoption of audio driver standards). Now, they cater to people watching cat videos. At the moment, there is no device close to the Surface Pro for this purpose. I don't believe this niche is enough to sustain the Surface Pro by itself, but I'm glad to have them right now. And I hope someone else out there is paying attention, which is why I post a comment just like this every time the Surface comes up on Slashdot.

      Not that there's anything wrong with cat videos.

      --
      You are welcome on my lawn.
    4. Re: Did they make money on Surface? by PopeRatzo · · Score: 4, Funny

      "It's all about ethics in Slashdot comments!"

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      You are welcome on my lawn.
    5. Re: Did they make money on Surface? by spongman · · Score: 5, Interesting

      of course, anyone who ever said anything nice about a Microsoft product is a shill...

    6. Re: Did they make money on Surface? by ranton · · Score: 4, Insightful

      of course, anyone who ever said anything nice about a Microsoft product is a shill...

      Mostly yes; There are a number of MS products which kind of work and are useful (e.g. Windows 7) there are a number which don't really work but you have to use (Excel - often you need to use it because it's broken the same way as the software your accountant uses).

      How is Excel on your list of "don't really work" apps? Excel is essentially Microsoft's killer app, and it isn't because you can't convert XLS documents to work with other competitors. It is because Excel is one of the best applications ever written (IMHO). My attempt to get used to the Apple operating system (I got a Macbook for work) was mostly successful but I eventually fell back to Windows because their version of Excel was so much better than the Mac version (not Apple's fault, but still important). There were some other minor reasons, such as me liking Notepad++ more than Sublime and my opinion that Windows 7 handles multiple large monitors better, but Excel was the main reason. I also like Visual Studio for most development, but IntelliJ was good enough. The alternatives to Excel were not good enough however.

      Once a company starts sponsoring PR agencies to shill on the internet, anyone who is helping them, even without knowing it, becomes unethical and complicit, at least negligently, in lying.

      People advocating for products they find useful is not lying. Opinions will always be biased, mostly because it is so hard to become such an expert in multiple product ecosystems that you can objectively compare them, but that doesn't make all opinions completely invalid. Most marketing is underhanded and manipulative, so if outrage over heavy handed marketing makes consumer advocacy unethical then all consumer advocacy would be unethical.

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      -- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
  2. Those bastards? by Anonymous Coward · · Score: 5, Informative

    They also "make money" at $20 per Android phone, even though they wrote **NONE** of the software. And the list of bogus software patents is public now, it's all crap. Screw them and their thievery.

    1. Re:Those bastards? by NotInHere · · Score: 4, Insightful

      At least they didn't taint my device with their software, that should be worth that money.

    2. Re:Those bastards? by ChunderDownunder · · Score: 5, Funny

      Ease up, Android will be one of the few Linux distros by 2016 not using systemd. :-)

  3. Did they really lose money by Anonymous Coward · · Score: 5, Insightful

    or just didn't make enough to also pay taxes?