Is This the End of Microsoft's Lumia?

In fact, the company posted weaker than expected figures for the whole quarter: $22.07 billion in revenue, $6.82 billion operating income, $4.97 billion net income and $0.62 earnings per share (all non-GAAP figures).

The US tech giant posted a net profit of US$3.8 billion as revenues dipped six per cent to US$20.5 billion in the fiscal third quarter to Mar 31.

Microsoft's cloud platform Azure is one of the mainstays in CEO Satya Nadella's growth strategy, where the cloud platform is fighting fiercely with rivals Google and Amazon Web Services (AWS).

This comes despite continued growth across its main divisions: Productivity and Business, Intelligent Cloud, More Personal Computing, with noted impressive growth for Azure where revenue shot up 120% year over year in constant currency.

Mobile division revenue declined a whopping 46%, as the company managed to sell only 2.3 million Lumia smartphones.

Adjusted revenue of $22.08bn was just shy of the $22.09bn analysts had expected, according to Thomson Reuters.

Nadella claimed Windows 10's productivity, security and device management capabilities are a hit with business users, adding that 83 percent of enterprise customers are in active pilots today.

Its Surface lineup continues to perform well, seeing an increase of 61% thanks to devices like the Surface Pro 4 and Surface Book. "As these organizations turn to us, we're seeing momentum across Microsoft's cloud services and with Windows 10", said Nadella in a statement.

Cloud computing is seen by many investors as Microsoft's salvation, a growing business that has convinced many there is a bright future for the company beyond the troubled personal computer (PC) market. Revenue slid 5.5% to $20.5 billion, and on an adjusted basis rose 1.6% to $22.08 billion.

Revenue in the group rose 1 per cent to $9.46 billion in the quarter.

Company shares sank, trading 4% lower in after-hours trading.

Microsoft only sold 2.3 million Lumia phones last quarter. Still, the company said, this quarter's result outperformed the overall PC market. Microsoft accounted its search ad revenue growth to Windows 10 usage, noting that 35 percent of its search revenue in March was driven by Windows 10 devices. A deteriorating PC market is also another trend that has impacted sales not only for Microsoft but for other major technology companies as well.

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