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Microsoft's device business marred by smartphone sales freefall

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By Tony Connelly | Sports Marketing Reporter

January 29, 2016 | 3 min read

The future of Microsoft’s device business is left uncertain after its latest quarterly report revealed that sales of its flagship Lumia phones plummeted by more than 50 per cent in a year.

Microsoft 10 phone
Microsoft phone

Microsoft confirmed that its devices revenue sank 22 per cent, which can largely be attributed to its troubled smartphones business. In the last quarter the company sold 4.5 million Lumia devices compared to 10.5 million at the same period last year, representing a massive 57 per cent decline.

Taken in context, the declining sales aren’t a huge surprise as the company has essentially scaled down its phone business after its $7.6 billion acquisition of Nokia and the laying off of 7,800 staff. Following this it announced that it would concentrate on a handful of flagship Windows phone models, instead of running it as a major business unit.

Microsoft 10 phone

Microsoft phone

The last quarter saw the release of new Microsoft-made flagship Windows 10 Mobile phones, the Lumia 950 and 950XL, however both failed to build excitement about the platform, despite powerful hardware features.

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It doesn't appear to be entirely giving up on its smartphone business though, as it was recently reported that the company was in negotiations to buy mobile ad network InMobi, in a deal reportedly worth $2bn.

Its Surface revenue on the other hand was up 29 per cent, thanks to the release of the Surface Pro 4 tablet and Surface Book laptop, during the quarter. The Surface business alone generated $1.35bn in revenue in the quarter.

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