Microsoft hardware business in painful transformation

It is understood that Microsoft's hardware business, including Windows phones and Surface series of tablets and notebooks, is clearly in a painful transition.

Microsoft reported today that its revenue from the equipment business segment at the constant exchange rate contracted by 22% in the previous quarter, mainly due to a 49% drop in revenue from the smartphone business in trouble.

In the summer of last year, Microsoft wrote down 7.6 billion U.S. dollars worth of assets—essentially reducing its mobile phone business assets to zero, cutting 7,800 employees—mainly through acquisitions of Nokia employees it received, and said it will focus on launching several flagship Windows models. Mobile phones, instead of the mobile phone business as a major business. In the last quarter, Microsoft released the Lumia 950 and 950XL, the flagship models running Windows 10 Mobile. Although the hardware configuration is not low and powerful, it has not been favored by consumers.

Therefore, the sales volume of Microsoft's mobile phones in the previous quarter was lower than that of the same period of last year. At the time, the mobile phone business was still owned by Nokia. It is not surprising.

In the previous quarter, the Surface Pro 4 Tablet PC and Surface Book notebook pulled, the Surface business revenue increased by 29%.

Microsoft used the Surface tablet to open up a new world. In the fourth quarter of 2015, both Apple and Google launched tablets similar to the Surface, and they are obviously boldly following Microsoft's strategy.

Microsoft has not abandoned the mobile phone business, hoping to reverse the decline in the mobile phone market. There are rumors that Microsoft is developing the Surface brand instead of the Lumia branded mobile phone. In fact, the word "Lumia" did not even appear in the last quarterly information that Microsoft disclosed to investors.

Once Microsoft gets rid of the Nokia mobile phone business, its hardware business will see a good growth.