Microsoft has published its Q2 fiscal 2016 earnings report today and according to the report the company has made $6.3 billion in net income on $25.7 billion in revenue. The most disappointing aspect in the fiscal report is the performance of Windows Phones.
The company sold only 4.5 million Lumia devices in the last quarter compared to 10.5 million YoY. While the Surface revenue has increased to 1.35 billion YoY, the Windows Phone revenue is at all time low with 49% drop YoY.
This can also be attributed to the fact that we haven’t seen too many Windows Phones released in the last quarter apart from the two flagship phones. Also, the delay with releasing Windows 10 Mobile and the issues with the OS might be a reason for low sales.
The company is planning to release the Windows 10 Mobile build probably in the next month with new devices expected in the budget category as well.
At the same time, commercial products and cloud services showed growth with Office 365 revenue growing almost 70 percent, while Office 365 consumer subscribers increased to 20.6 million in the latest quarter.
Gaming revenue was also up by 5 percent on the strength of Xbox Live. Xbox Live monthly active users are up 30 percent YoY and there are 48 million last quarter. Game revenue was up 47 percent but hardware revenue was down 9 percent. Microsoft sold more Xbox Ones but fewer Xbox
Microsoft sold more Xbox Ones but a lesser number of Xbox 360s, and the Xbox Ones were sold at a lower price than before.
“we haven’t seen too many Windows Phones released in the last quarter apart from the two flagship phones” That’s certainly a valid reason. Plus, Microsoft hasn’t have much marketing presence on the phone market; you can’t market old phones that have not much evolved since they were launched by Nokia.
And even the flagships 950’s are not fully baked with a W10M that is still not RTM.