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Microsoft gets unexpected bump in Windows revenue

Gregg Keizer | Jan. 30, 2017
But OS sales gain can't stop More Personal Computing group's third straight decline.

The Surface line, now Microsoft's biggest money maker in MPC's device subgroup, was down 2% from the final quarter of 2015. While the fourth quarter has historically been big for Surface, Microsoft had no new models to pitch in 2016 other than the high-priced, in-short-supply Surface Studio.

On the plus side, abandoning the smartphone market and phasing out sales of the less lucrative Surface Pro 3 boosted the MPC operating income, a measure of profit. For the December quarter, MPC's operating income was $2.5 billion, an explosive 33% gain over the same quarter in 2015.

December's operating system growth was the second straight quarter of double-digit increase, coming after the September quarter's 26%. That period's operating system boost was also attributed to the demise of Microsoft's low-margin phone business.

mpc q416 2 
The More Personal Computing division's revenue slid 5% in the December quarter, but operating income -- a measure of profit -- jumped by 33%. Microsoft credited the operating income increase to the decision to dump smartphones. Credit: Microsoft


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