Through some simple math and use of Microsoft's 2011 fiscal year sales figures, you can uncover Microsoft's poor revenue for the Windows Phone platform, as Seattle Pi has discovered. In Microsoft's annual report for the last fiscal year, the overall revenue for the Entertainment and Devices Division sat at US$8.716 billion, and the Xbox division took up $8.103 billion of that revenue.
What does that leave for all the other areas of the Entertainment and Devices Division? $613 million, a portion of which is Windows Phone and the rest is absorbed by Zune, Mediaroom, Surface, hardware and other projects. This reveals the “abysmal” (as Seattle Pi puts it) revenue the Windows Phone division generated, and as it only shows revenue, the actual profits gathered from mobile devices is going to be even less.
Of course there are some notable flaws with simply calling Windows Phone's revenues a complete failure. Unlike the Xbox division, Microsoft's Windows Phone division only sells licenses to WP7 and gathers advertising revenue; no actual hardware is sold to generate massive revenue. Secondly, Google and their Android OS, which also produce next-to-no physical hardware makes effectively $0 in revenue as their operating system licenses are free, instead relying on market saturation for their paid services, mobile advertising and Market to generate money.
That said, Microsoft's Windows Phone division is still doing poorly, with Microsoft's own Steve Ballmer calling their WP7 sales “very small.” As $613 million is the absolute maximum for the Phone division (it's likely less than $500m), Microsoft need to up their game in fiscal year 2012, and with the impending launch of Mango, sales for WP7 will hopefully be on the rise.