Microsoft's More Personal Computer group saw some decent enough performance, with Windows revenues dropping but keeping ahead of the overall PC market's decline and Surface revenues remaining strong. However, Microsoft's phone business continued to suffer in FY16 Q2.
Overall, phones declined by 49% CC (constant currency), representing the platforms continue struggles even given the recent release of the flagship Lumia 950 and 950 XL smartphones. In fact, device revenue overall fell 22% driven by phones, even given a Surface revenue increase of 29%.
Microsoft certainly has some work ahead of it to make its smartphone business viable. One has to wonder how many quarters of revenue decreases it will take before Microsoft considers dropping the business completely--even with plans for an upcoming Surface phone in the works.