Why Microsoft Ended Surface Financing Program



Financing program shut down after a year

Microsoft (MSFT) has ended the program that allowed customers to spread out payments for a new Surface Pro device over two years. The program was introduced a year ago. In addition to paying for the cost of a new device over two years, the program also allowed Microsoft hardware customers to upgrade to a new Surface Pro device after 18 months as long as they returned their old device in good condition.

Microsoft said it was ending the Surface financing program after “much thought and consideration,” but didn’t elaborate on the decision. The program ended on August 31 for new customers.

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Program appealed to student customers

The Surface financing program is said to have mainly targeted student customers. Microsoft, Apple, and Google are in the race for revenue in the education market. Google captured the lion’s share, about 60%, of laptops and tablets for the classroom last year, according to Futuresource Consulting.

Global education technology is poised to grow to $252 billion by 2020. And the growth opportunity is enormous, as only 2.0% of the $5.0 trillion global education market is currently digitalized.

Microsoft’s revenue jumped up 17.5%

Microsoft’s revenue increased 17.5% YoY (year-over-year) to $30.1 billion in the June quarter. Revenue rose 17.3% YoY for Apple and 25.6% YoY for Google parent Alphabet (GOOGL) in that period. Sony (SNE) and IBM (IBM) grew their June quarter revenues by 5.1% and 3.7% YoY, respectively. HP (HPQ) grew its revenue by 11.7% YoY in fiscal Q3 2018, which ended in July.


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