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Microsoft's doing well, but Lumia smartphone sales are tanking

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Lumia 550

Microsoft's latest financial report looks good - except for the part about how many Lumia smartphones it has sold of late.

The company has just revealed its Q3 financial results, which leads up to March 31. It made a net profit of $3.8 billion on $20.5 billion revenue, which actually represents a drop year-on-year.

But the biggest drop here is reserved for those smartphone figures. Microsoft sold just 2.3 million Lumia phones during its latest quarter.

Now, the Windows Phone market is infamously bad, but even by such low standards this was an awful quarter. It represents a drop from 8.6 million handsets sold during the same period last year - that's a 73 percent cut.

Microsoft's mobile revenue dropped accordingly by 46 percent.

All of which makes Microsoft's overall results seem pretty good. Indeed, elsewhere things are looking a good deal rosier.

Surface sales increased 61 per cent year-on-year, representing growth of $1.1 billion over the past three months. Microsoft is thanking the Surface Pro 4 and Surface Book for that timely boost.

There's also been growth all-round in Microsoft's cloud services, with Office commercial revenue growing 7 percent and Office consumer revenue growing 6 percent. Azure revenue grew 120 percent.

Microsoft is a lot more quiet than it used to be on the Xbox front, thanks to Sony's unassailable position with the PS4, but Xbox Live monthly active users actually grew 26 percent to 46 million over the past three months.

Search ad revenue grew by 18 percent, thanks to growing Windows 10 usage.

Related: Windows 10 Mobile review

Even some of the losses are positive, such as the fact that Windows OEM revenue declined 2 percent. That's actually better than the PC market.

All in all, a pretty good quarter for Microsoft all things considered - but something clearly needs to be done about Windows Phone.

Next, check out our comparison of Windows 10 and Windows 95:

Would you consider a Lumia as your next smartphone? Let us know in the comments.

Dead Words

April 22, 2016, 11:44 am

Considering Microsoft has been doing absolutely no marketing and they sell most of their phones unlocked instead of on carriers I'd say 2.3 million isn't all that bad. And over 15 million non-Lumia phones were sold.

Pbryanw

April 22, 2016, 2:24 pm

Yep, and considering the lukewarm reviews for the 950 & the fact that they've got holes in their line-up (no successor to the 640 yet - the 650 isn't it), they're not doing too badly.

You just get the feeling, though, that the mobile phone business isn't a focus for Microsoft anymore. They need to hurry up with the Surface Phone :)

Dead Words

April 22, 2016, 2:33 pm

Microsoft has already said the phone business isn't a focus for them. I believe they said they plan to focus more on Windows 10 Mobile in about a year which lines up with the rumoured Surface phone launch.

toboev

April 22, 2016, 6:25 pm

I read that also, which I took to be their 'marketing' for this year's phones :)

Dead Words

April 22, 2016, 6:31 pm

Basically haha but, I mean, I understand why Microsoft isn't focusing on Mobile right now. They aren't in a position to take advantage of it yet.

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