Microsoft Surface business surges as upcoming dual-screen Android device surfaces in FCC filings

Revenue in Microsoft’s Surface hardware business jumped 28% to more than $1.7 billion in the quarter ended June 30, its biggest result ever outside the holidays.

The increase was due to higher demand for Surface laptops, tablets and other devices due to stay-at-home orders in the pandemic, the company said. Pent-up demand from previous supply chain bottlenecks also may have played a role in the larger-than-expected Surface revenue increase in Microsoft’s fiscal fourth quarter.

“I believe Microsoft is doubling down on its commitment to Surface and this is demonstrated in a much expanded lineup and features specifically for regulated industries,” said analyst Patrick Moorhead of Moor Insights & Strategy. “In Q3, I believe Microsoft could have shipped a lot more of the new Surface lineup but it couldn’t get enough supply out of Asia. Q4 was quite different and I think represents more of the future growth demand curve.”

The surge comes amid reports that Microsoft’s upcoming Surface Duo device could be released sometime this summer. An apparent filing for the dual-screen Android device was spotted in Federal Communication Commission records this week in another possible sign that it’s ahead of schedule.

Microsoft executives including Chief Product Officer Panos Panay have been offering glimpses of the Surface Duo device on social media in recent weeks.

The company previously delayed the release of the larger dual-screen Surface Neo device, running Windows 10X. Mary Jo Foley of ZDNet reported this week that the new version of the operating system is now slated for release in 2021, with the Neo and other dual-screen devices pushed to 2020 as a result.

In its fourth quarter results, Microsoft also saw a boost from stay-at-home orders in its productivity, cloud and gaming businesses, including subscription versions of Microsoft Office, and the Microsoft Azure cloud platform.

Revenue from Xbox content and services was up 64% for the quarter, helping to drive an overall 13% increase in Microsoft revenue, to $38 billion for the quarter.

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