Update: Microsoft is expecting strong demand for Surface next quarter with revenue growth in the “low teens.” Windows growth in “low to mid single digits.”
The big news for More Personal Computing, especially the Surface division, is good all around. Microsoft is reporting $1.3 billion in revenue for Surface, which is up just one percent year-over-year ($1.329 billion).
That number contrasts with the figures for early January, which pegged Surface revenue at nearly $2 billion.
In the More Personal Computing segment, which encompasses Windows, Xbox, Search, and Surface, revenue reached $11 billion, which represents a three percent increase. Windows OEM revenue stayed flat year over year, while Windows Commercial products saw a rise of 17 percent. Search advertising revenues rose one percent.
Microsoft does not break out the numbers for Surface individually, so it is unclear which device is selling the best. Microsoft launched Surface Pro 7, Surface Pro X, and Surface Laptop 3 (including a new 15-inch model) in late 2019.
Undoubtedly, the current pandemic has had an impact on supply chains from China, consumer purchasing power, demand, and the needs of growing work-from-home employees.
Windows 10 non-Pro revenue did decline by 10 percent “driven by continued pressure in the entry-level category and supply chain constraints in China.” On the flipside, Windows OEM Pro revenue was up 5 percent due to “strong Windows 10 momentum” and “demand from remote work and learn scenarios offset by supply chain constraints in China.”
However, Microsoft was quick to point out that overall, “COVID-19 had a minimal net impact on the total company revenue.”
More information on guidance for next quarter is expected on the Microsoft earnings call at 5:30 PM ET. This article will be updated with that information as it becomes available.
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