New Model Shifts Hint at Surface Turmoil (Premium)

New Model Shifts Hint at Surface Turmoil

As I noted in yesterday's quarterly earnings analysis, Microsoft's Surface business is in trouble. And while more meaningful fixes are needed, the firm is moving to stem the bleeding in the short term.

To recap, Microsoft revealed this week that Surface revenues increased $126 million in the quarter, a gain of just 1 percent year-over-year. It also quietly noted that it sold fewer units, year-over-year. That's troubling because the software giant released four major new Surface devices in 2017---Surface Laptop, Surface Pro (2017), Surface Book 2, and Surface Pro with LTE---or five, if you count the new 15-inch Surface Book 2 as a separate product. In the same quarter a year ago, it had released only two niche products, Surface Studio and Surface Book with Performance Base. And that was pretty much it for the entire year.

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