updated 05:05 pm EDT, Thu October 28, 2010
Microsoft Q3 2010 hits record through Windows 7
Microsoft this evening hit a record high $16.2 billion in revenue for its summer quarter. The figure was a 25 percent jump from a year ago and was helped by unfettered Windows 7 sales as well as Office 2010 and the Xbox 360. It wouldn't quote numbers but sold 38 percent more game consoles than it did last summer, owing largely to the slim Xbox; the console has been in the sales lead for four months.
The growth would have been a smaller 13 percent, but the company noted that it had to delay reporting revenue from Windows 7 pre-orders last year as it didn't ship the OS until October 22. The OS was evidence that the PC industry was healthy, Microsoft said. It has sold 240 million Windows 7 copies in a year of availability, making it the fastest-selling Windows release ever.
Results weren't uniformly positive for the Redmond, Washington-based company. Despite Bing gaining market share and officially replacing Yahoo's search engine, Microsoft's Online Services group lost $560 million, or more than 17.4 percent worse than the loss a year earlier. The company has traditionally had much smaller search share than Google and has also had a harder time persuading companies to go with its cloud services over platforms like Google Apps.
The current results won't reflect any of the immediate results of the Windows Phone 7 launch, which only just began October 21 and won't reach the US until November 8. Microsoft has acknowledged that WP7 is largely a reset of the platform and has been willing to let Windows Mobile slip in favor of the newer OS.
In spite of the record, Microsoft's performance was a symbolic changing of the guard as it could no longer claim a revenue lead over Apple. The Mac maker earned $20.34 billion over the same period. Apple has been helped by its dependence on hardware, which costs much more than Microsoft's software licenses, but has also successfully defeated Microsoft in areas outside of its core Office and Windows fields. The iPhone currently has much larger market share than Windows Mobile, while iPods have always outsold the Zune line.
Microsoft has also lately suffered defeats in the tablet space. iPad sales may have already exceeded the total Windows tablet market by several times, and most significant designs won't ship until next year.