Microsoft Shouldn't Count on Surface Mini to Reverse Its Tablet Slide

Microsoft Surface sales were way down last quarter, according to the company's earnings report. That's no reason to panic — the previous quarter was the holiday, after all — but the drop is so large that there may be more behind it than seasonal hiccups.

Revenue from the Surface was nearly cut in half, Microsoft reported, declining from $893 million to about $500 million, or about 44%. While revenue grew 50% year-over-year, that's still a big dive. By comparison, Apple's iPad revenue declined 33% over the same period.

By holiday last year, it looked like the Surface — which was responsible for a nearly billion-dollar write-down in Microsoft's 2013 revenue — had overcome its growing pains. The second generation of the hardware released in the fall generally got better reviews than the first, and Windows 8.1 addressed many of the software problems. Price cuts for the original models helped, too. Read more...