Strong Surface Pro revenue will help Microsoft’s traction in the market
Microsoft's Windows 10 release explains exciting features (Part 6 of 11)
Surface Pro tablet revenue crossed $ 1 billion
On January 26, Microsoft (MSFT) reported that the company sold ~$1.1 billion worth of Surface Pro tablets in its fiscal 2Q15 earnings. This is an increase of 24% on a year-over-year, or YoY, basis.
The above chart shows the Surface tablets’ financial performance since the device launched. This is the first time that the company sold more than $1 billion in Surface tablets. Surface Pro emerged as a strong seller for Microsoft. As a result, it raised the expectations for the Surface Pro 4. Surface Pro 4 is expected to hit the markets at the end of 2015.
If Microsoft’s Surface Pro 4 is able to contribute significantly towards the overall revenue, it will benefit Microsoft investors. It will also benefit ETFs like the Powershares QQQ Trust ETF (QQQ) and the Technology Select Sector SPDR Fund (XLK). These ETFs have 8% and 9.61% exposure to Microsoft, respectively.
Surface Pro lifts the Device and Consumer segment’s revenue
In 2Q15, Microsoft’s Devices and Consumer segment’s revenue grew 8% to $12.9 billion. In the $12.9 billion, Surface tablets and accessories only contributed $1.1 billion in revenue. In 1Q15, Microsoft stated that Surface Pro’s gross margins were positive for the first time.
According to Design & Trend, the Surface Pro Mini will likely have a screen size of 8–10.1 inches. This makes its display comparable to Apple’s (AAPL) iPad Mini. Google’s (GOOG) (GOOGL) Nexus 9 operates in the same space. It has an 8.9 inch screen.
The Surface Pro’s launch is highly anticipated. The Surface Pro has the ability to play games in the laptop and tablet form. In contrast, its peers only offer integration between operating systems. The Surface Pro 4 is expected to come with a resolution of 2160×1440 pixels.
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