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POV: 5.8 million Lumia sales in Q3 2015 isn’t pretty but Microsoft may be least bothered.

Microsoft-CEO1

Microsoft has released its Q3 2015 financial results and thing don’t exactly look pretty when you talk about Lumia sales. Only 5.8 million Lumia were sold that compares to 8.4 million in last quarter. If you compare YoY then it looks worse as Microsoft sold 9.3 million Lumia in Q3 2014.

Devices revenue decreased $1.8 billion or 49%, mainly due to lower revenue from phones, driven by the shift in strategy for the phone business, as well as lower Surface revenue. Phones revenue decreased $1.5 billion or 58%, as we sold 5.8 million Lumia phones and 25.5 million other non-Lumia phones in the first quarter of fiscal year 2016, compared with 9.3 million and 42.9 million sold, respectively, in the prior year. Surface revenue decreased $236 million or 26%, primarily driven by the release of Surface Pro 3 in June 2014.

But it will not be wrong to say that Microsoft has seen it coming and they may be least bothered. Microsoft’s layoff of Nokia employees and then write-off of acquired Nokia’s D&S business sent negative signals to the market and media coverage as expected was largely negative. Customers are quite sensitive and informed nowadays, so the impact can be drastic.

Secondly, in absence of new and compelling devices in Mid-range (Lumia 830 was not received that well due to many reasons) and High-end categories it was clear that either the focus has shifted or Microsoft is not counting on this year to push its phone’s sales volume and revenue. Basically Microsoft went through a transition phase with drastic measures like write-offs, so consequences were largely expected.

What’s next:

It may seem that Microsoft may be targeting year 2016 to bring in some cohesive strategy and ammunition. Here is why we think that we will see things changing a bit in next year.

  • Windows 10 Mobile launches in November-December along with new devices like Lumia 950 and Lumia 950 XL. Even devices from vendors like Acer Jade Primo look promising. This all should come in play somewhere in December and so we will hardly see any impact this year.
  • Microsoft is readying a new portfolio of business oriented smartphones to be introduced in Q1 and Q2 2015. Surface Phone even if it comes with Lumia branding may get Microsoft more traction in Enterprise.
  • Low-end and Mid-Range will be getting Lumia 550, Lumia 650, Lumia 750 and Lumia 850 as the refreshed portfolio and it should stop the slide.

What if it doesn’t work:

It has too much on stake for Microsoft to call it a day so soon after projecting Universal Apps and Unified OS as the cornerstone of its mobility strategy. We believe that Microsoft will try its level best to get traction with its smartphones throughout 2016 and beyond. For Microsoft the real smartphone push begins in Q2 2015 but given its past track-record we need to see how they manage to move faster and increase their reach. News of Lumia 950 and Lumia 950 XL exclusivity in US markets don’t augur well, however.

In worst-case scenario, If it doesn’t work at all we can see some more restructuring and write-offs in 2017 for sure, but what’s the fun in being pessimistic??

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Nayan

Nayan has more than 10 years of experience of covering Technology and innovations. He is a big Nokia fan and Tech disruptions aficionado. He loves to review new cool gadgets and writing about Android, iOS, Gadgets and general Technology stuff. He has been associated with other well-known Tech sites WinCentral and GadgetOx since long.

He currently sports a Lumia 950 XL and Nexus 5X. Other interests include listening to Nu-Metal Hits and Kick-Boxing.
Write to him at Email: [email protected]

http://www.nokiapoweruser.com
  • Marc Vuorinen

    Hopefully MS will upgraded the 750 and 850 specs since based on leaked specs it didn’t competitive enough

    • Kamal

      The leaked specs were obsolete as you can see in the case of Lumia 550. So, I think Lumia 750 and especially Lumia 850 may have some better specs than what was leaked earlier.

  • that_guy

    Windows 10 mobile needs projects Astoria and Islandwood as well as Centennial and Oxford to help it out of this state. Those projects need to work flawlessly. Hopefully enough developers take advantage of these new tools so new users not longer have to suffer not having the apps they want or need. It’s no use promoting Window 10 Mobile to iOS and Android users if it will only inconvenience them cause of the app gap.

    • Kamal

      Promotion needs to be done, as it is not about the apps alone, though apps do matter, I agree. Windows 10 Mobile brings some unique features and these should be made known to users on other platforms.

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