Microsoft's Surface Tablet Shows Signs of Life
Strong sales gains suggest that Microsoft may be turning a corner in its lopsided battle against Apple's iPad and a flood of Google Android tablets.Microsoft's Surface tablet, while not setting sales records, is looking like less of a dud. After markets closed on Jan. 23, the company announced a record-setting second quarter. The company generated $24.52 billion in sales in the three months ending Dec. 31, 2013, and beat the Street with earnings of $0.78 per share on profits of $6.56 billion. The Redmond, Wash.-based tech titan credited its stellar financials, in part, to strong demand for its enterprise software offerings and brisk adoption of its consumer electronics offerings, including its Surface tablet line. "Our Commercial segment continues to outpace the overall market, and our Devices and Consumer segment had a great holiday quarter," said CEO Steve Ballmer in a company statement. Surface revenues climbed to $893 million during the second quarter of its 2014 fiscal year compared with $400 million in Q1. In total, revenues in Microsoft's Devices and Consumer segment rose 13 percent year-over-year to reach $11.91 billion, $4.7 billion of which can be attributed to the company's hardware.
During an investors' conference call, Microsoft CFO Amy Hood said that demand for the company's Surface product portfolio, which includes an ARM-friendly version of the slate that runs Windows RT and Pro models that run the full-fledged Windows 8, "continued to grow, benefiting from improved execution at retail and favorable reviews of the new Surface devices." She added that "both units and revenue more than doubled this quarter" as more customers warmed up to a device that straddles the fence between desktop and tablet computing paradigms.