The only other sour note in Microsoft’s device business was the fact that its other flagship device, the Surface tablet line, also saw revenue fall to its lowest point in five quarters, $672 million. Microsoft executives blamed the revenue decline on increased sales of its lower-margin Surface 3 tablet, and a lull while buyers waited for what they anticipated was a refresh of the Surface lineup, including the Surface Pro 4 and the Surface Book.
If you’re Microsoft, the good news is that the high-margin Book and SP4 will begin selling early enough to make a difference in the coming quarter. And, just as Microsoft’s cloud business helps propel the rest of the company, so too will those high-margin Surface products help keep the Lumia line afloat. Eventually, though, it’s going to be sink-or-swim for Lumia. But when?
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