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Microsoft Surface Sales Sink In Latest Quarter

Microsoft Surface sales took a major hit last quarter as consumer wait for the latest and greatest, Microsoft claimed.

Surface tablet sales fell 35.1 percent in the quarter ending Sept. 30 to $672 million because of “market anticipation of a new Surface Pro device for the holidays,” Microsoft chief financial officer Amy Hood said.

Cellphone hardware revenues for the company’s first 2016 fiscal quarter fell 54 percent to $1.1 billion, “reflecting our updated strategy” in which Microsoft dramatically scaled back its phone-making business to focus on a limited selection of premium phones, the company said.

The Pro was announced earlier this month with Oct. 26 availability. The fourth-generation Pro gets a slightly larger screen size at 12.3 inches, more RAM and storage, a new pen, and thinner design with a starting price of $899, up from the Pro 3’s starting price of $799

Surface sales in the first fiscal quarter were lower than in any of the company’s previous four quarters. In the company’s fiscal 2015 fourth quarter, Surface sales hit $888 million following sales of $713 million in the third quarter, $1.1 billion in the second quarter, and $908 million in the first quarter.

Despite the decline, Hood said Surface “continues to gain ground with businesses and schools, creating opportunities for our rapidly growing partner channel including Accenture, Dell and HP.” She also said the number and size of deals in Microsoft’s commercial segment for Surface increased double-digits year-on-year.