Microsoft’s hardware strategy under scrutiny after record loss

Customers – mainly enterprises – that use the Long-term Servicing Branch (LTSB) for updates will continue to get the levels of support Microsoft has offered in the past: five years of Mainstream support and five more years of Extended support. Unfortunately, for those who don’t own and don’t intend to buy an Xbox One console, some of the touted features won’t be very attractive as they depend upon a linked Microsoft games console.

Microsoft (MSFT) suffered a net loss of $3.195 billion for Q4 on revenues of $22.2 billion when the company reported earnings this week. According to Bloomberg, Microsoft shares fell 4 percent to $45.38 in extended trading on Tuesday.

Microsoft once counted on splitting its sales fairly evenly between corporate and consumers, but these days it’s almost all about corporate and the cloud in particular. Daniel Ives, an analyst at FBR Capital Markets, graded it a “B” quarter.

Microsoft has to adapt to newer hardware as the market for PCs contracts. The company released new cloud products and services, including Azure data-center features and Office 365 productivity programs, and brought out versions of its mobile applications for Apple Inc. and Google Inc. operating systems.

He’s working on a much bigger scale, and as Microsoft focus on the Xbox One to PC streaming functionality through Windows 10, they’ve got their hands full for now.

Even so, Chief Executive Satya Nadella said he remained committed to making phones to attract Windows users. Microsoft’s computing and gaming hardware revenues improved by 50% (in constant currency), primarily due to 117% improvement in Surface 3 revenues to $888 million. Revenue from its Xbox game business rose 27 per cent.

Revenues dipped five percent from a year ago to 22.2 billion in the fourth fiscal quarter which ended June 30.

Microsoft is hoping to put the bad news about its mobile phone business behind it as it enters another, potentially important, chapter in its struggle to regain influence in the technology business. With Nokia behind it, Microsoft is free to look to the future, which includes the Windows 10 launch in the near term and, probably, some more measured mobile phone efforts down the road.