Microsoft has topped investor’s expectations by announcing record revenues of $24.5bn (£14.7bn) for the October-December quarter, up 14% from the previous three months. The ongoing decline in PC sales was offset by strong sales of the company’s Office suite and Xbox consoles, pushing net income to $6.56bn (£3.94bn).
The quarter proved that Microsoft’s recent push into hardware is gaining momentum, with the technology giant reporting worldwide sales of 3.9 million Xbox One consoles during the quarter, along with 3.5 million sales of the now 8-year old Xbox 360. Whilst there was no mention of unit sales for Microsoft’s Surface tablets, it was reported that “Surface revenue more than doubled” from the previous quarter to $893 million. This is a promising direction for Microsoft’s first foray into the incredibly competitive tablet market, which is still dominated by Apple’s iPad.
Microsoft is positioning the Surface, which features a detachable keyboard cover, as the future of personal computing, but it has so far failed to capture consumers’ attention. The IDC recently revealed that the market share of Windows-based tablets has risen from 1% in 2012, to 3.4% in 2013. Whilst this is still a small percentage of the market, that number is predicted to rise to 10.2% by 2017.
Whilst revenue from Windows fell 3%, software income was bolstered by increasing sales of the Office suite to businesses. The software giant recently rebranded Office as a cloud-based subscription service called ‘Office 365’ and Microsoft revealed that the service now has 3.5 million subscribers.
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