Microsoft’s Mobile Division Did Not Have A Good First Quarter This Year

The first three months of 2016 was not so good to Microsoft’s mobile business. Well, nobody actually expected the company to do well, but even then, the first quarter of the year has been dismal to software giant’s mobile hopes. Based on the latest quarterly report released by Microsoft, it registered a drop in mobile revenues of 46 percent. 

Indeed, over the past three months, Microsoft has sold only 2.3 million units of its Lumia smartphone devices, which represents a 73 percent decrease compared to the first quarter of the previous year. More worrying is the fact that its dropping sales is becoming a continuing trend -- during the final quarter of 2015, it posted a decrease in sales of 54 percent.

Still, it is not the end of the world for Microsoft. As far as profits are concerned, Microsoft can still boast that its bottom line is still positive. From revenues of $20.5 billion, the company registered a net profit of $3.8 billion. With regards to its Surface devices, the software giant posted growth of $1.1 billion, which represents a 61 percent improvement year over year. Big credit goes to the healthy sales of its Surface Pro 4 tablet device and Surface Book laptop offerings.

Microsoft has also achieved growth in its non-Windows related divisions, especially in Office, Azure, and other cloud based services and brands. Revenues for Office increased by 7 percent in the commercial sector, while there was 6 percent improvement in the consumer sector. This can be attributed to the warm reception of its Office 365 release, which has posted growth of 22.2 million consumer subscribers. As for Azure, it increased by a dizzying 120 percent.

When Satya Nadella, the chief executive officer of Microsoft, had decided to try to steer the company to cloud based services, it may have helped hold the software giant’s finances afloat during the first quarter of 2016. Indeed, when its PC division took a hit, it managed to keep the revenues flowing through its cloud offerings.

As for its Xbox brand, Microsoft has reported that it has seen growth of 26 percent year over year in the number of monthly active users for its Xbox Live. This means that the total active user population has now topped 46 million consumers. Moreover, Microsoft has also noted that revenues from its advertising division has increased by a respectable 18 percent.