Surface Pro 4 has strong first quarter, Windows Phone revenue drops sharply in the period
While Microsoft has found a winner in the mobile space with the Surface Pro tablet, it continues to have difficulties gaining any traction with its smartphone division. For the three month period covering January through March, Microsoft's phone revenue declined 46% in constant currency. The first quarter of 2016 was the first to include a full three month's worth of revenue from Microsoft's first trio of Windows 10 Mobile powered handsets. Those three models are the Microsoft Lumia 950, Microsoft Lumia 950 XL and the Microsoft Lumia 550.
Microsoft actually makes more money from licensing patents to Android device manufacturers, than it makes from selling Windows Phone handsets. But Microsoft can't just stop making phones. The software giant needs to continue selling Windows powered handsdets in order to offer a complete ecosystem that includes PCs, tablets, laptops, video game consoles and wearables.
source: Microsoft via MSPowerusers