Microsoft has revealed its Q1 2017 earnings and it turns out there is a 26 per cent drop in Surface revenue which indicates that Redmond desperately needs Surface Pro 5 to boost this quarter’s earnings.
Surface Pro 4 was launched in 2015 and the two-in-one helped Microsoft through two holiday seasons, but it turns out that the charm of the current generation two-in-one is over and it couldn’t continue with the momentum it had acquired during Christmas 2016. November and December 2016 were great months for Surface Pro 4 sales partly due to discounts and partly because MacBook Pro 2016 didn’t really impress a whole lot of people.
Come the first three months of 2017, Surface Pro 4 discounts continued but they didn’t really help Microsoft maintain the earnings from the Surface line-up. Surface Pro 4 is being offered at huge price cuts, but Surface Book isn’t being sold off at heavy discounts. Surface Book range of laptops is something that high-end users would find useful and not your everyday Internet browsing and movie watching computer user. That’s why Surface Book revenues have been down.
Surface Pro line-up of two-in-one is the most appealing for all types of consumers – be it students or professionals or even enterprise users. In its latest earnings report, Microsoft has blamed decline in Surface revenues on lower than expected Surface Pro 4 sales.
It is over one and a half year since the launch of Surface Pro 4 and consumers as well as the industry as a whole eagerly await a new Surface Pro device. Currently consumers are jumping ship to Surface Pro 4 alternatives and that is hurting Microsoft sales.
To ensure that people continue to buy Surface Pro hardware, Surface Pro 5 is required and that too within a couple of months at the maximum otherwise Redmond will lose a lot of Surface Pro 4 momentum and end up hurting itself.