Microsoft today announced their earnings release for Q4 FY15. Phone Hardware revenue decreased $748 million or 38%. Gross margin decreased $158 million, due to lower revenue. Also, Windows Phone revenue decreased $552 million or 68%, mainly due to $382 million of revenue recognized in the prior year at the conclusion of the commercial agreement with Nokia, and a decline in royalty revenue.
· Lumia phones revenue declined, driven by a mix shift to lower price point devices. We sold 8.4 million Lumia phones in the fourth quarter compared to 5.8 million in the prior year (+1.7 million pre-acquisition).
· Non-Lumia phones revenue declined, driven primarily by lower volumes. We sold 19.4 million non-Lumia feature phones in the fourth quarter compared to 30.3 million in the prior year.
· Phone Hardware revenue included an unfavorable foreign currency impact of approximately 4%.
Looks like Microsoft sold many low-end Windows Phone devices which caused decrease in revenue. Another bitter truth is that Microsoft didn’t have any flagship device on sale which would have offset the declining revenues.