14 DAY TRIAL // Microsoft has reported revenue of $1.3 billion in Q4 2016 (Q2 FY 2017) for the Surface lineup, with total revenues for the year now reaching $4.3 billion.
And while at first glance this doesn’t seem a lot for a company the size of Microsoft, the growth posted by the Surface series should be worrying especially for Apple, as the Redmond-based software giant specifically targeted customers of its Cupertino rival with its products.
The Surface has been marketed as an iPad replacement from the very beginning, while the Surface Book laptop landed as an alternative to the MacBook. Finally, the launch of the Surface Studio allowed Microsoft to step into the all-in-one PC market and give customers a worthy substitute to Apple’s iMac.
But can the Surface lineup really be considered a threat to Apple’s supremacy? Yes and no.
Microsoft and Apple in the hardware market
At first glance, Apple has no reason to worry about the growth of the Surface, pretty much because its hardware business posts results that are still impressive, mostly thanks to the iPhone. In Q4 2016 alone, Apple generated revenue of $28.16 billion only with the iPhone, down 12.6 percent from $32.21 billion versus the same quarter in 2015.
And yet, when comparing results of the iPad division, which is the one specifically targeted by Microsoft with the Surface, the difference isn’t really that huge.
The iPad posted revenue of $4.26 billion in the last quarter of 2016, down 6 percent, and what’s even worse is that sales are declining with every quarter. Couple this with Microsoft’s Surface growth and we get a battle that’s very likely to become really interesting in the next few quarters.
And then, it’s the general opinion on Microsoft’s and Apple’s products. Microsoft has been highly praised for its Surface devices, and the arrival of the Surface Studio was received with applauses by the media and users alike.
On the other hand, Apple had to deal with criticism of both sides after introducing the new MacBook in late 2016, mostly because of the low level of innovation that its overhauled devices brought.