Microsoft announces sales of 10.5m Lumia devices in Q2

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Phone hardware revenue of $2.3 billion while Surface tablet revenue grew 24 per cent to $1.1 billion 

Microsoft has announced second quarter earnings that show its Lumia handsets are selling faster than ever, with its Surface line of tablets surpassing the $1 billion mark.

The software giant sold 10.5 million Lumia phones in the three months leading up to December 31, up 28 per cent year-on-year, bringing in $2.3 billion (£1.5 billion) in sales. Microsoft said this was driven by growth in the affordable smartphone market.

Sales of Microsoft Surface range of tablets grew by 24 per cent annually, surpassing the $1 billion mark with sales of $1.1 billion (£730 million). Overall, its Devices and Consumer division increased by eight per cent to $12.9 billion (£8.56 billion).

Group profits fell 10.6 per cent from $6.56 billion (£4.35 billion) in financial year Q2 2014 to $5.86 billion (£3.89 billion) in the second quarter of its 2015 financial year. But overall sales increased by eight per cent from $24.52 billion a year ago to  $26.32 billion (£16.26 billion).

Microsoft blamed the dip in profits on costs incurred as part of the integration of Nokia following its £4.5 billion acquisition of the Finnish manufacturers handset division last year.

Microsoft revealed it had spent $243 million (£161 million) on restructuring and integration costs. Since it completed the Nokia purchase in April, Microsoft has announced plans to lay-off 18,000 employees, many who used to work for Nokia.

Microsoft CEO Satya Nadella, who replaced Steve Balmer in the role in February, said the software firm was undergoing a period of transition.

“Microsoft is continuing to transform, executing against our strategic priorities and extending our cloud leadership,” said Nadella. “We are taking bold steps forward across our business, and specifically with Windows 10, to deliver new experiences, new categories, and new opportunities to our customers.”

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