Microsoft India’s Revenue Falls 12% Post Mobile Phone Business Closure

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Income from search online-advertising and services, however, grew 11 percent to Rs 483 crore. The company’s net profit fell 23 percent to Rs 358 crore.    

The discontinuation of the mobile phone business has apparently hit US technology major Microsoft hard.

According to the company’s latest filing with the Registrar of Companies, Microsoft India’s turnover fell 12 percent to Rs 6,312 crore in 2017-18 after it discontinued marketing, sales and distribution of mobile devices and accessories.

Earlier, the company used to earn revenue of Rs 896 crore a year from the mobile business. Excluding this part of income, Microsoft’s revenue otherwise remained flat in 2017-18, the company said in its annual report.

The company’s net profit, however, fell 23 percent to Rs 358 crore.

Almost 93 percent of the company’s revenue comes from retail software products, which declined marginally to Rs 5,828 crore in the FY18. Income from search online-advertising and services grew 11 percent to Rs 483 crore.

“This year’s (2017-18) numbers seem to be a one-off case,” ET quoted Sanchit Vir Gogia, chief executive at Greyhound Research, as saying.

He agreed that Microsoft had taken a hit owing to the discontinuation of the “lowmargin and high-tension” mobile marketing business.

“We cannot really count these numbers as a reflection of their broader game plan for the country. This is a loss (decline in business) that they have to make in the short term to realign their business towards cloud, cyber security,” Gogia was further quoted.

Microsoft’s Mobile Business Failed to Take Off

Microsoft bought Nokia’s mobile device unit in 2014 for $7.2 billion. Just two years later, the US technology major declared that it had written off the deal, which resulted in thousands of job cuts.

Later it sold Nokia’s branding rights to Finnish firm HMD Global and Taiwan’s contract manufacturer Foxconn for $350 million.

Last year, Microsoft finally admitted that Windows Phone is dead. The company’s Joe Belfiore had, in a series of tweets, revealed that the software giant will no longer develop new features or hardware for Windows 10 Mobile.

Later at Microsoft’s Build and Inspire conferences, CEO Satya Nadella dropped the company’s mantra of “mobile-first, cloud-first” in favour of a focus on what he described as the intelligent cloud and intelligent edge.

 

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