Surface 3 is nearing end of life; will there be a Surface 4?

Stocks of Microsoft's Surface 3 are dwindling, and the company is not planning to restock them, telling Brad Sams:

Since launching Surface 3 over a year ago, we have seen strong demand and satisfaction amongst our customers. Inventory is now limited and by the end of December 2016, we will no longer manufacture Surface 3 devices.

The Surface 3 was launched just over a year ago, in May 2015, and featured a slimmed down set of specs to its more powerful big brother, the Surface Pro 3 (which has itself been upgraded to the Surface Pro 4).

Many pundits are questioning when we'll see a Surface 4, but the question may be more "if" than "when."

SurfacePro4Book

The Surface Book and Surface Pro 4

While the Surface line of devices is doing well for Microsoft, having definitely won a mind-share battle and selling well for the company, take a look at the statements by Microsoft in their recent earnings statements:

  • FY 15 Q4 Surface revenue grew 117% to $888 million, driven by Surface Pro 3 and launch of the Surface 3
  • FY 16 Q1 (no mention of Surface)
  • FY 16 Q2 Surface revenue increased 29% in constant currency driven by the launch of Surface Pro 4 and Surface Book
  • FY 16 Q3 Surface revenue increased 61% in constant currency driven by Surface Pro 4 and Surface Book

As you can see, while sales of the Surface line of devices are doing well, they're driven by the Surface Pro, and to some extent the Surface Book. Microsoft's omission of the Surface 3 revenues in its earnings statements isn't an oversight.

In addition, some sites are taking to extrapolating the recent AdDuplex numbers to calculate Surface Book sales (Microsoft does not release detailed sales numbers for its hardware products), but those numbers are wildly speculative, at best. AdDuplex relies on apps, running their code, and installed on user machines to derive their numbers.

While it's a good guess that most Windows phones have at least one AdDuplex enabled app running, there could be many many Surfaces, including the Surface Book, used as dev or business machines and not likely to have consumer apps installed, thereby skewing the numbers. It may be a good estimate, and about as good as we'll get, but it's rough, at best.

Microsoft has indicated that it will be launching a new wave of devices to go along with its Redstone 2 update in early 2017, so we may have to wait until after the holidays to see what the company has up its sleeve, but if you're counting on a Surface 4, don't hold your breath.

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