Another problem Microsoft will need to move beyond: The acquisition of Nokia in 2013 that was widely seen as disastrous. In July, the company wrote off $7.6 billion as an "impairment charge" related to that deal.
On the other hand, the Surface Pro -- billed by some as a tablet, but advertised by Microsoft as a 2-in-1 that functions as a lightweight laptop when a detachable keyboard is added -- has done better than the phones. The Surface line, driven by the Surface Pro 3, was up 24% for the fiscal second quarter, topping $1.1 billion, Microsoft reported in January.
"When you include the PC and 2-in-1 alone, the Windows 10 platform is valuable," said Moorhead. "Neither Google nor Apple has been able to take meaningful chunks of business out of the PC space. Volumes aren't growing, but they're not shrinking like the tablet market. And now, Apple and Google are doing 2-in-1s, a testimonial to the strength of the Windows platform."
If new Lumia smartphones are seen as secondary in importance to a new Surface Pro 4, an updated Microsoft Band would fall into third place in importance. The $200 band first went on sale nearly a year ago, but was quickly out of stock.
Microsoft advertised its original Band as a way for users to experience the Microsoft Health app, so the question to be answered is what kind of new functions can be added to the next-generation device.
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