Microsoft quarterly results reflect troubled PC market, middling Windows 8 launch

Posted:
in General Discussion edited January 2014
Microsoft this week announced its second quarter of fiscal 2013 earnings, revealing more than 60 million Windows 8 licenses sold. Industry observers, though, remain cautious on the software giant in light of trends in the PC sector.

Microsoft's Surface RT
Microsoft declined to provide sales numbers for the Surface RT.


The Redmond giant pulled in $21.5 billion in revenue for the quarter, with a profit of $6.38 billion, or $0.76 per share, up from $5.87 billion a year ago and $5.31 billion for the quarter previous. Of that figure, the Windows division accounted for about $5.9 billion in profit.

Despite the profit uptick, Wells Fargo senior analyst Maynard Um sees overall PC industry dynamics remaining difficult for Microsoft. In a note to analysts on Friday morning, Um noted that the enterprise sector is still largely moving to Windows 7 ? which surpassed Windows XP in install base last year ? and that consumer demand for Windows 8 remains soft.

On the consumer end, Microsoft is caught between a soft economy ? which hampers demand for new Windows 8-based machines ? and the rise of smartphones ? sectors dominated by Apple and Google's operating systems. These two trends have kept consumer PC demand soft, and Um doesn't expect any meaningful upward shifts in PC unit sales until Windows 8 units are able to hit lower price points.

With regard to Microsoft's own smartphone and tablet efforts, signs are mixed. Manufacturing partner Nokia, which has staked its future on the success of the Windows Phone 8 platform, moved 4.4 million Lumia units last quarter, showing solid improvement as it attempts to crawl back from the brink.

Microsoft gave no word, though, on how fared its first major computer hardware initiative, the Surface RT. The Windows RT-based tablet debuted late last year to mixed reviews, and CEO Steve Ballmer has characterized sales as "modest."

In neither the quarterly report nor the accompanying conference call, however, did Microsoft's executives go into detail on exactly how well Microsoft's first tablet sold. They opted instead to speak in general terms, citing "really great demand" for "some of the touch devices that we brought to market." Chief financial officer Peter Klein said several times that Surface sales were among the top three drivers of Microsoft's 11 percent total revenue growth, alongside Windows retail upgrades and multi-year enterprise licensing deals.

The device is estimated to have sold around a million units since its launch, though it was available initially only at Microsoft's online and physical stores before retail availability was expanded.
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Comments

  • Reply 1 of 48
    gazoobeegazoobee Posts: 3,754member
    Based on the logic of the result the market had to Apple's stellar quarter ...

    I'm guessing Microsoft stock went *up* by 10%?
  • Reply 2 of 48


  • Reply 3 of 48
    philboogiephilboogie Posts: 7,438member
    "...and the iPad doesn't have a physical keyboard which means it's not good at anything. No, I like our strategy, I like it a lot"
  • Reply 4 of 48
    gazoobeegazoobee Posts: 3,754member


    Did we fall through some portal and end up on Imgur?  


    Everyone appreciates boobs, but this is barely even tangentially related to the thread. 

  • Reply 5 of 48
    asciiascii Posts: 5,941member
    That's a good improvement in results. Maybe the story everyone keeps telling about tablets smashing PCs to a tiny minority will happen, but not quite to that extent. Maybe 50% of people will use tablets and 50% laptops, instead of 90-10. In which case Apple should give equal love to the Mac as the iPad.

    It's easy to get caught up in these stories of how things are "supposed" to turn out, but then MS comes out with this respectable increase in profit. In a case of lore vs numbers, numbers win.
  • Reply 6 of 48
    I really dig that shirt. That's the best a blue screen of death has ever looked.
  • Reply 7 of 48
    philboogiephilboogie Posts: 7,438member
    gazoobee wrote: »
    Did we fall through some portal and end up on Imgur?  
    Everyone appreciates boobs, but this is barely even tangentially related to the thread. 

    1000
  • Reply 8 of 48
    gazoobeegazoobee Posts: 3,754member


  • Reply 9 of 48
    Spooky!

    We are now officially trolling ¡
  • Reply 10 of 48


    Regardless of how you feel about Microsoft, the fact is that it did make record revenues. That is a good sign for the economy, even though there are all sorts of caveats in their numbers.


     


    For those wondering why $MSFT did not crash, it's all about expectations. If you don't understand this by now, get out of the stock market.

  • Reply 11 of 48


    But the kids love Windows 8...

  • Reply 12 of 48

    Quote:

    Originally Posted by ascii View Post



    That's a good improvement in results. Maybe the story everyone keeps telling about tablets smashing PCs to a tiny minority will happen, but not quite to that extent. Maybe 50% of people will use tablets and 50% laptops, instead of 90-10. In which case Apple should give equal love to the Mac as the iPad.



    It's easy to get caught up in these stories of how things are "supposed" to turn out, but then MS comes out with this respectable increase in profit. In a case of lore vs numbers, numbers win.


    Let's use our brains a little, shall we?


     


    Sales of windows 8 are 70% WORSE than VISTA, despite all the ultrabook propaganda, surface propaganda, win 8 tablets BS. The end of that road is getting closer.


     


    Obviously Microsoft is a very nice company with some good talent so they have dozens of new ways to maintain that amazing profit margins and to try something new. What would I do? Just destroy the traditional desktop interface, all the legacy code and create a ultrafast and light windows version looking forward, not looking back. Just like what Apple did with the mac/ppc, OSX/iOS.


     


    I mean, who in their right mind would prefer an Android version of the ONE X instead of an Windows (the ultrafast and light version) version of the same phone, especially on enterprise? Same with tablets and PCs.


     


    Since thousands of people would work on that version (Microsoft itself, traditional OEMs, Mobile OEMs, etc), we would get a very nice, fast and reliable operating system.

  • Reply 13 of 48
    alfiejralfiejr Posts: 1,524member
    funny how none of the press/web reports bothered to mention that MS was able to ship - not final consumer sales - 60 million W8 licenses only thanks to huge launch period price discounts of 35% to 75% depending on what kind of upgrade you bought. i'd bet this also included initial price incentive deals of some kind for the OEM's, so they 'banked' them.

    these discounts will end in several weeks. anyone who hasn't upgraded their PC to W8 from W6 or W7 by then likely never will. so that one time sales bump is over, and from then on it will be nearly all new PC licenses alone, minus any OEM channel stuffing. let's see how that goes as the year progresses.

    a few reports at least kinda noticed that business are sticking with W7. probably about 99% of them. which means W8 is an enterprise flop, but the reporters couldn't quite figure that out yet.

    this kid glove coverage of MS compared to the hysterical trashing of Apple ... how can they keep a straight face?
  • Reply 14 of 48

    Quote:

    Originally Posted by stelligent View Post


    Regardless of how you feel about Microsoft, the fact is that it did make record revenues. That is a good sign for the economy, even though there are all sorts of caveats in their numbers.


     


    For those wondering why $MSFT did not crash, it's all about expectations. If you don't understand this by now, get out of the stock market



     


    It's not all about expectations, it's all about stock manipulation. AAPL at a P/E of 10.2 makes about as much sense as wearing your underwear to work - on your head. Apple's warchest increased to $137 billion, it beat expectations on earnings, and it just barely missed expectations on revenue - for which it was rewarded with a 12% drop in stock price.


     


    (Insert an inappropriate comment.)

  • Reply 15 of 48
    wizard69wizard69 Posts: 12,828member
    Without boobs there would be no reason to have any threads.
    gazoobee wrote: »
    Did we fall through some portal and end up on Imgur?  
    Everyone appreciates boobs, but this is barely even tangentially related to the thread. 
  • Reply 16 of 48


    Originally Posted by umrk_lab View Post




    Originally Posted by PhilBoogie View Post




    Originally Posted by Gazoobee View Post


     



     


    ????

  • Reply 17 of 48
    timbittimbit Posts: 331member
    boriscleto wrote: »
    But the kids love Windows 8...

    I like windows 7. It works well for me. I was given a free windows 8 key and I refuse to install it because it is one of the worst operating systems I have seen (for desktop)
  • Reply 18 of 48


    The gradual slide into irrelevance continues. 

  • Reply 19 of 48

    Ballmer bashing threads always get me......................hmm, maybe I should just enter a period there.

    Your right TS, sorry 'bout that.
  • Reply 20 of 48

    Quote:

    Originally Posted by pedromartins View Post




    Quote:

    Originally Posted by ascii View Post



    That's a good improvement in results. Maybe the story everyone keeps telling about tablets smashing PCs to a tiny minority will happen, but not quite to that extent. Maybe 50% of people will use tablets and 50% laptops, instead of 90-10. In which case Apple should give equal love to the Mac as the iPad.



    It's easy to get caught up in these stories of how things are "supposed" to turn out, but then MS comes out with this respectable increase in profit. In a case of lore vs numbers, numbers win.


    Let's use our brains a little, shall we?


     


    Sales of windows 8 are 70% WORSE than VISTA, despite all the ultrabook propaganda, surface propaganda, win 8 tablets BS. The end of that road is getting closer.


     


    Obviously Microsoft is a very nice company with some good talent so they have dozens of new ways to maintain that amazing profit margins and to try something new. What would I do? Just destroy the traditional desktop interface, all the legacy code and create a ultrafast and light windows version looking forward, not looking back. Just like what Apple did with the mac/ppc, OSX/iOS.


     


    I mean, who in their right mind would prefer an Android version of the ONE X instead of an Windows (the ultrafast and light version) version of the same phone, especially on enterprise? Same with tablets and PCs.


     


    Since thousands of people would work on that version (Microsoft itself, traditional OEMs, Mobile OEMs, etc), we would get a very nice, fast and reliable operating system.



     


    This is a very good idea!


     


    Add new [reimplemented] versions of Office and other MS apps for the new OS.  This would satisfy most home/personal needs.


     


    In their new OS, MS should allow efficient emulation of legacy Windows OSes -- just like Mac OS X can run Windows, etc. with Parallels, etc.


     


    This would ease the transition for enterprise/SMB users who have apps/procedures that require legacy Windows.


     


    Developers would be incented to update legacy apps to state-of-the-art hardware and OS -- and make additional sales.


     


    The biggest problem would be legacy apps (developed in-house or by 3rd-parties) where the code/developer is no longer available...  These situations would require longer to migrate or obsolete/replace.


     


    Something like:



    1. release the New Intel OS, say, for $29


    2. release the New ARM OS, say, for $5


    3. emulate valid copies of legacy Windows XP, 7, 8


    4. announce now new features to legacy Windows -- just maintenance

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