Microsoft Plans Cheaper Surface Tablets, Makes $6.38 Billion During Holidays

The reception for Windows 8 and accompanying Surface tablets has been mixed so far, but Microsoft still sees both as a key part of its future. During a conference call detailing the company's second quarter earnings on Thursday, Microsoft hinted that it will be releasing cheaper models of its Surface tablet.

According to Slashgear, Chief Financial Officer Peter Klein said that Microsoft is "working closely with chip partners and OEMs to bring the right mix of devices." He went on to say that the company plans to "expand the product lineup" and offer "a greater variety of devices at a bigger variety of price points."

The Surface Pro is set to release on Feb. 9, and reports suggest that the Redmond-based company sees the launch as a second opportunity to promote its Windows 8 operating system. Confusion has been rampant regarding the difference between Windows RT and Windows 8.

As for Microsoft's actual earnings, the company reported a profit of $6.38 billion dollars off of $21.5 billion in revenues.

Despite the fact that Windows 8 and Surface have struggled, they boosted the Windows division by bringing in $5.9 billion in revenue, a 24 percent increase from the previous year.

"Our big, bold ambition to reimagine Windows as well as launch Surface and Windows Phone 8 has sparked growing enthusiasm with our customers and unprecedented opportunity and creativity with our partners and developers," said Steve Ballmer, chief executive officer. "With new Windows devices, including Surface Pro, and the new Office on the horizon, we'll continue to drive excitement for the Windows ecosystem and deliver our software through devices and services people love and businesses need."

Another area that saw growth was Microsoft's Server and Tools department, which deals with selling and licensing the company's products to business instead of consumers. This division grew nine percent year-to-year, giving momentum to the idea that Microsoft is slowly transitioning into an enterprise company rather than a consumer-focused one.

"We saw strong growth in our enterprise business driven by multi-year commitments to the Microsoft platform, which positions us well for long-term growth," said Klein. "Multi-year licensing revenue grew double-digits across Windows, Server & Tools, and the Microsoft Business Division."

Meanwhile, the Entertainment and Devices (Xbox) division saw sales decline 7 percent from the previous holiday season, emphasizing the need for a new video game console to hit the shelves this year.

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