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MS sales soar on Vista, trail on Zune

updated 02:10 pm EDT, Fri April 27, 2007

MS Leads on Vista Sales

Microsoft is dealing with mixed blessings in its lineup, the company's latest quarterly financial results have shown. The three-month period ending in March was largely positive for the software developer, which saw its revenue jump 32 percent to $14.4 billion despite the typical seasonal slump. The change was in part expected due to the near-simultaneous launches of Windows Vista and Office 2007, which triggered a flurry of software and PC upgrades in January. However, the company added that even these new releases fared better than predicted -- suggesting that hints of poor sales were ill-founded.

CFO Chris Liddell bore out the claim in his breakdown of the company's figures, which had Vista generating at least $300 million more than expected while Office 2007 created an additional $200 million beyond forecasts. It was an "excellent quarter," Liddell said.

Although CEO Steve Ballmer had told investment groups that predictions of exceptional sales were "out of whack" with reality, the company has officially maintained that its sales were doing very well in the wake of Vista. It reported that the new OS sold twice as quickly as Windows XP, even in the habitually piracy-ridden Chinese market where many had expected Microsoft to fare the worst. No mention was made, however, of the exact number of copies sold.

Less successful, however, was the company's entertainment division. The primarily hardware-oriented branch of the company saw a 21 percent drop in sales compared to the holiday season, which was cited as a reflection of the typical post-holiday slump. The decrease wasn't surprising, said Liddell, as these sales almost always dropped in the wake of the gift-giving period.

Much of this poor performance was attributed to the Zune, say reports. While the Xbox 360 is doing well and will have sold as many as 12 million units from the 2005 launch until June, the new media player's expensive launch campaign and relatively flat sales are said to have taken away some of the profit from the entertainment group.

Microsoft was still prepared to sell one million Zunes by the middle of the year, Liddell noted, indicating a still modest uptake compared to the over 10 million iPods sold by Apple in its latest quarter alone.

By Electronista Staff
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  1. bfalchuk

    Fresh-Faced Recruit

    Joined: Jul 2003


    Why bother?

    I just don't get it...the Zune loses a lot of money, and sales pathetically. I really don't see how they will break even, let alone make money on the franchise, even over a very long time horizon. Seems like they were better off going the route of PlaysForSure, and having like 15% share than getting 9% share with Zune, but losing a boatload overall from marketing in addition to what they lose on each device.

  1. MacnTX

    Fresh-Faced Recruit

    Joined: Apr 2004


    Zune is a joke

    So let's get this straight, they're still expecting to have sold 1 million Zune players total since launch by July 2007. That seems quite optimistic based on everything independent we've heard so far related to how Zune sales are doing in the marketplace.

    But let's say they do accomplish this goal, that means that while they would have sold 1 million Zune players over a 9 month period, Apple will have sold somewhere in the neighborhood of 42 million iPods during the exact same time frame.

    Therefore, I'd hardly call the Zune any competition at all when it's sales are *at best* 1/42nd of what Apple's are.

  1. boulderfrog

    Fresh-Faced Recruit

    Joined: Apr 2007


    you gotta be kidding

    Zune...9 per cent??...of what?

    I want to smoke what you've been smoking.

  1. wings_rfs

    Fresh-Faced Recruit

    Joined: Dec 2002


    9% of ....

    "Zune...9 per cent??...of what? "

    9% of brown MP3 players. No wait... I think they cornered the market on that one.

    Maybe it's 9% of MP3-players-that-add-DRM-to-your-nonDRM-files. Ummm, nope, they cornered that market too.

    Or 9% of MP3-players-with-pixels-so-big-you-have-to-hold-it-at-arms-length-not-to-see-them. Could be.

    I know... 9% of 30GB hard-drive players that were SHIPPED to retailers (poor guys) but not yet actually SOLD to an end-user.

    Yeah, that's it.

  1. doctor9

    Fresh-Faced Recruit

    Joined: Aug 2001



    I mean, come on, at this point can't we all agree that the Zune is a failure. Not to say the next iteration will be better or completely revamp the music model, but this current version is c***. You have got to be a moron or a Microsoft fanboy to actually see the value in buying one of those things. Purchase songs with points?!?!? Give me a break...Microsoft can't even copy ideas well anymore.

    Still living on Office and Windows...and that train will come to an end sooner than later.


  1. loudpedal

    Forum Regular

    Joined: Oct 1999


    Zune pity

    My co-worker just came in this morning with a new iPod. We talked for a while and it came out that he originally bought a Zune but couldn't get the software to load on his XP machine (this is a very savvy Windows guy). He was so frustrated that he took it back to Best Buy and traded it in for two Video iPods (one for him and one for his wife). iTunes loaded flawlessly. He's slowly becoming an Apple fan.

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