Microsoft Windows Sales Plunge 33 Percent as Company Looks Ahead to Win 8
October 19, 2012 12:21 PM
comment(s) - last by
Q1 2013 likely left Microsoft's Ballmer sweaty and frustrated.
Some divisions profit, but Microsoft faces uncertainty as it races ahead to Windows/Windows Phone 8
Earnings week for the tech industry has brought
, with a few pleasant surprises (
)). Microsoft Corp.'s (
definitely fall into the "bad news" category.
Microsoft, which operates two fiscal quarters ahead of the calendar quarter, saw itself narrowly miss
in both revenue and net income (profit). The company pulled in $4.47B USD (expected: $4.72B USD) in profit on revenue of $16.008 USD (expected: $16.416B USD).
A key to the miss was plunging revenue from the Windows unit, which saw a big drop in Windows 7 sales. Microsoft better hope that predictions of Windows 7 being the "
next Windows XP
" aren't true, because it's counting on Windows 8 to revive sales, with movement of the
once-sterling Windows 7
slowing to a sluggish pace.
Steve Ballmer, chief executive officer at Microsoft,
roared at his critics
, commenting in the earnings release, "The launch of Windows 8 is the beginning of a new era at Microsoft. Investments we’ve made over a number of years are now coming together to create a future of exceptional devices and services, with tremendous opportunity for our customers, developers, and partners."
Microsoft is currently selling Windows 8 upgrades via pre-order.
Microsoft did defer $1.36B USD (as it typically does) in pre-order revenue from its
Windows Upgrade Offer
program. Windows 8 official
launches next Friday
on Oct. 26.
One bright spot in the earnings report was Microsoft's servers unit, which saw an 8 percent bump on revenue, mainly on big growth in SQL Server and System Center. And in the also-somewhat-good news category, Bing and the online service division crept a bit closer to no longer being
massive money losers
, with revenue 9%, driven by a 15% increase in revenue per-click. That's particularly good as the dominant force in the search market, Google Inc. (
in revenue per-click
after traffic acquisition costs (TAC).
The Entertainment and Devices division earnings were a revenue draw (down 1 percent). It is currently focused on reviving Microsoft's smartphone bid with
Windows Phone 8
, which launches next week. It also was able to brag that the Xbox 360 remains
sales king of the American consoles market
, with a 49 percent estimated market share. The Xbox 360's successor, which some are expecting to be
named the Xbox 720
, is not expected to land until sometime in late 2013 or early 2014.
Windows Phone 8 launches next week. [Images: Nokia (left), HTC (right)]
Microsoft remains one of the best earning and most successfully diversified hardware/software giants in the consumer electronics industry. However, it continues to be defined by the burden of high expectations, speculation, and intense scrutiny surroundings its "misses".
Shares of Microsoft were hammered in morning trading, down almost 3 percent to $28.70 USD/share.
FT [analyst estimates]
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RE: Please for the love of god don't take this the wrong way.
10/19/2012 4:17:51 PM
You know, one of the things I was hoping for with Windows 7 was a free, decent hypervisor. Not just the ability to run an application "in" XP.
There really isn't much difference in the interfaces of OS X and Windows 7, but Windows 8 does take things in a new direction, which I'm also a fan of, if I can quickly get back up to speed in my tasks. Automation and customization was one of MS's best features - the new interface could mean a start from scratch. And a start from scratch might mean, re-evaluate all the options on the market again, not just sticking with Windows.
One of my biggest peeves about the new interface is cosmetic. For some reason the two-tone, square icons really irritate me and I don't know why. I hope you can customize those, but I'm not a huge fan of squares - yes I'd even prefer triangles :) On the other hand, it's fluid free-movement between zones/pages.
Now, one the that impressed me with OS X was all the programs that came installed with it. There was postgres, perl, apache, mysql, php, ruby, python, git - the list goes on. There were about 150 pre-installed applications that were actually useful, which Windows doesn't come with. Not only was it nice to have them, but it saves so much time when setting your environments back up. They're right at your fingertips. Other than that, I feel that Windows is much more responsive (no waiting or errors that OSX seems to have).
RE: Please for the love of god don't take this the wrong way.
10/20/2012 7:38:21 AM
You're forgetting Hyper V 3.0. Which is an enterprise grade Type 1 hypervisor you're getting for free. And it works insanely well. I've even built up VMs on my Windows 8 workstation and then moved them to our Hyper V cluster once I have everything the way I want it. That way I can work on the plane or in the hotel room without depending on connectivity back to the network until I actually need it. And vice versa, I could take a Windows 8 laptop and move a few VMs to it in a pinch if I absolutely had to.
"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan
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