Microsoft’s Surface hardware business shrunk by $285 million — and it’s weirdly a good thing for Microsoft

surface pro 4 on lapMicrosoft Surface BookMelia Robinson/Business Insider

Microsoft reported gain today, display plain expansion in a all-important Office 365 and Microsoft Azure cloud computing businesses. Still, it wasn’t all good news.

The Microsoft Surface hardware business, encompassing the Surface Pro tablet, Surface Book laptop, and Surface Studio desktop PC, shrunk revenues 26%, a $285 million decrease, over a same duration in 2016.

The reason for a decline, according to Microsoft: “increased cost foe in a reward 2-in-1 category and product end-of-lifecycle dynamics.”

No doubt, that’s not good news for a Surface business. Still, in a uncanny nonetheless genuine way, it’s good news for Microsoft.

“Increased cost competition” only means that other manufacturers are building their possess Surface-style, high-end automobile tablet/PC devices, and offered them for reduction than Microsoft’s possess product lineup. 

This would be a problem if, like Apple, Microsoft was a hardware company. But a whole indicate of a Surface products in a initial place was to get PC manufacturers building some-more touch-friendly, stylus-friendly Windows tablets and computers.

microsoft aspect pro 4Microsoft Surface Pro 4Microsoft

So if each PC manufacturer out there is building lots and lots of Windows PCs that contest with a Surface…well, again, that’s bad for a Surface business, nonetheless good news for a Windows business. Given a altogether decline of a PC market, Windows is fighting opposite Apple’s Macs for a bigger square of a smaller pie — and a strategy seem to be working. 

Apple isn’t sitting idle, pitching a iPad Pro inscription as a laptop alternative, perplexing to compare a sales representation for a Surface Pro. Users haven’t accurately come along for a ride, though, with a iPad still lacking a right brew of facilities to reinstate a laptop.

As for a bit about “product end-of-lifecycle dynamics,” that could impute to a fact that a Surface Pro 4 inscription is now over a year and a half old, presumably hinting during a rumored Microsoft Surface Pro 5 nonetheless to come.

In a meanwhile, Microsoft is holding an eventuality in New York City on May 2nd. And while a Surface Pro 5 is doubtful to make an appearance, design some kind of refurbish on a Microsoft hardware front.

Get a latest Microsoft batch price here.

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