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Microsoft revenue plummets in spring

updated 05:15 pm EDT, Thu July 23, 2009

Microsoft Q2 2009 Results

Microsoft this afternoon reported a steep drop in its financial health for the spring triggered by its most important businesses. The Windows developer experienced its first-ever sequential drop in revenue and saw its revenue fall 17 percent year-over-year to $13.1 billion. The company's net income also declined by a sharp 29 percent compared to spring 2008, landing at $3.05 billion.

The company wasn't specific on all causes but primarily blamed the world economic collapse for hurting the "global PC and server markets." It explained that PC sales are estimated to have dropped between 5 and 7 percent in the quarter, reducing the number of new Windows licenses. About $276 million in revenue for Windows 7 upgrades also won't be reported until the OS is officially released in October, Microsoft added.

It expects its fortunes to turn around in the near future, including through the release of Windows 7; others in the pipeline mostly address deficiencies in the mobile space with both Windows Mobile 6.5 and the Zune HD unofficially poised to ship in September. Its business expenses also shrunk by $750 million due to previously announced job cuts for 5,000 workers.

The news nonetheless underscores mounting problems for Microsoft's market share. Although the PC market shrank on a year-to-year basis, Apple's Mac shipments grew 4 percent in the same timeframe even with continued higher average system prices that would theoretically render it more sensitive to tougher economic conditions. Microsoft's decline also implies an apparent ineffectiveness for its Laptop Hunters ad campaign in persuading customers to opt for more frugal Windows notebooks.

As part of an effort to restore the Windows brand following damage caused by the initial launch of Vista, Microsoft is also planning to launch retail stores near Apple's locations in the fall.



By Electronista Staff
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Comments

  1. scotte75ky

    Fresh-Faced Recruit

    Joined: Jan 2008

    +7

    LOL

    The bigger they think they are the harder they fall. Bu-buy Microsoft!

  1. climacs

    Forum Regular

    Joined: Sep 2001

    +5

    repeat after me:

    ha. ha. ha.

  1. elroth

    Junior Member

    Joined: Jul 2006

    +7

    wow

    I think Ballmer should be put on suicide watch - there's no way for him to spin this.

    All these months of commenting that Macs are too expensive, and that the Laptop Hunters ads are working - hogwash. That Microsoft VP who was doing cartwheels last week (his words) is probably in an alcoholic stupor right about now.

    It's really going to be amazing to watch Microsoft unravel step-by-step.

  1. ff11

    Fresh-Faced Recruit

    Joined: Apr 2004

    -5

    Re: LOL

    I wouldn't be so quick to LOL. I expect business will pick up for MS once they release Windows 7, and even now, they are still HUGE and dominate the OS and office areas with no close second.

  1. Constable Odo

    Fresh-Faced Recruit

    Joined: Aug 2007

    -2

    Ballmer's spin will be...

    Once Windows 7 is released, revenue will double, no triple, no quadruple because everyone on the planet will be upgrading to Windows 7. That's what Ballmer will say and merely repeating what all Microsoft fanbois are saying. Windows 7 will rush across all continents like a flood, devouring every OS, especially Mac OSX like it never existed. Apple will be out of business in six months because Windows 7 is so good even Mac users will want to run it and since you get more value from a $600 PC than you can from a $1000 Mac, why bother owning a Mac at all.

    So there you have it. Plummeting revenues in the spring, rocketing revenues in the fall. Not to worry. Microsoft always wins. Buy Microsoft now at $25 and ride it to $50 by January.... NOT! LOL

  1. nat

    Junior Member

    Joined: Mar 2002

    +5

    hand it to 'em

    gotta hand it to the ms fanbois. they've hung in there. just wait til vista gets here. years and years later vista came and windows still sucked.

    but... just wait til 7 gets here.

    yugo could have used customers like them. it might have made a decent car by now.

  1. Foe Hammer

    Fresh-Faced Recruit

    Joined: Feb 2005

    +1

    This has just got ...

    ... to make Baldmer want to get up and dance!

  1. BTBlomberg

    Forum Regular

    Joined: Sep 2005

    +2

    The Laptop Hunters

    MS always mentioned MacBooks in their ads and they say how they are cool. I guess that just helped Apple have the best Laptop sales they have every had. Now they need to go after iMacs or the MacPro so their sales can be raised. THose advertising dollars really helped . . . Apple. Way to go Ballmer and dweebs.

    Yes, Windows 7 will be GREAT. A great disappointment. It's just VISTA SP3, right? Bug fix and clean up. I guess after 9 years they could not get it right the first time.

  1. boris_cleto

    Fresh-Faced Recruit

    Joined: Sep 2002

    +3

    Beleaguered

    Is M$ "Beleaguered" yet?

  1. MisterMe

    Fresh-Faced Recruit

    Joined: May 2007

    +4

    Sins Catching Up

    Microsoft has been struggling against an inexorable decline for 10 years now. Most most the Redmond Monopoly's business units operated at a loss. They have beens subsidized by the minority of its profitable units.

    The popular press preferred to report on Bill Gates, the Geek Billionaire. The Microsoft fan-boys were convinced that Microsoft would always be dominant because it was dominant. Even most Microsoft haters did not pay attention to the number of computer users who were drifting away from reliance on Microsoft products.

    It is not an accident that Internet Explorer's share of web traffic has dropped below 70%. Neither is it an accident that neither Windows Media 10 nor Windows Media 11 content make up more than a drop of media content on the Internet.

    You can't say that the Emperor has no clothes, but he is down to his skivvies.

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