A few Windows Phone-related and other snippets from the full press release:
Microsoft Corp. today announced revenue of $26.5 billion for the quarter ended December 31, 2014. Gross margin, operating income, and diluted earnings per share (“EPS”) for the quarter were $16.3 billion, $7.8 billion, and $0.71 per share, respectively.
These financial results include $243 million of integration and restructuring expenses, or a $0.02 per share negative impact, related to both Microsoft’s restructuring plan announced in July 2014 and the ongoing integration of the Nokia Devices and Services (“NDS”) business. There is also a $0.04 per share negative impact related to income tax expense resulting from an IRS audit adjustment.
“Microsoft is continuing to transform, executing against our strategic priorities and extending our cloud leadership,” said Satya Nadella, chief executive officer of Microsoft. “We are taking bold steps forward across our business, and specifically with Windows 10, to deliver new experiences, new categories, and new opportunities to our customers.”
Devices and Consumer revenue grew 8% to $12.9 billion, with the following business highlights:
- Surface revenue of $1.1 billion, up 24%, driven by Surface Pro 3 and accessories
- Office 365 Home and Personal subscribers increased to over 9.2 million, up 30% sequentially over prior quarter
- Search advertising revenue grew 23%, with Bing U.S. market share at 19.7%, up 150 basis points over prior year
- Xbox console sales totaled 6.6 million units, with strong holiday season performance
- Phone Hardware revenue of $2.3 billion, with 10.5 million Lumia units sold driven by growth in affordable smartphones
Of course, the 10.5 million Lumia sales can be added to by other OEMs to arrive at a final Windows Phone sales figure for the quarter - I'd expect at least another million from all the new and existing partners. In context, this is more than Sony's Xperia smartphone sales line, but around a quarter of Apple's 2014 average iPhone sales/qtr.
As we discussed in the latest AAWP podcast, there's going to be a big boost in Windows phone (note the small 'p'!) sales and interest once Windows 10 gets a foothold in the desktop and laptop market in the summer and beyond - and it will, thanks to Microsoft's decision to make it a free upgrade for anyone with Windows 7 or above. I'd expect similar Windows Phone sales for Q1 2015 and then a ramp up to around 20 million worldwide by the end of 2015.