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Windows revenue declines second time in a row, 2% all year

updated 04:35 pm EDT, Thu July 21, 2011

Microsoft Q2 2011 shows Windows on decline

Microsoft on Thursday showed small if mounting problems for Windows with another drop in revenue for its most important business. The company saw its second straight quarter of declines in the Windows group's revenue, which dropped one percent in the spring. The decline also led to Windows' revenue dropping for the entire fiscal year by two percent.

The company justified the drop as the result of its business settling down in the year after the Windows 7 launch. Without the spurt from the then-new OS in late 2009, revenue growth would have roughly been in line with the two to four percent growth of the broader industry, Microsoft argued. As evidence, it pointed to its reaching 400 million Windows 7 licenses sold.

So far, the company has been silent on how much of the decline was owed to netbook sales collapsing. Microsoft's revenue from netbooks dropped 40 percent in the winter as people either bought iPads instead or saw little incentive to upgrade.

Of all its divisions, the fastest-moving group was its Entertainment & Devices group. The team's revenue cooled off after hot holiday sales from the Kinect but, at $1.49 billion, had shot up 30 percent year-to-year and 45 percent for the full year.

Overall, Microsoft's revenue was up eight points to a record $17.37 billion, which still put it over $10 billion behind Apple's $28.57 billion. Its net profit was also up a high 30 percent to $5.87 billion, though this was leaning mostly on its business and server groups.

The Windows developer's movement in PC revenue was in sharp contrast to Apple's, where its Mac shipments were up 14 percent year-to-year without having to lean on a new OS release. Microsoft predicts its total business will still grow three to five percent in revenue between now and June 2012 but will hinge both on its ability to offset the Mac and iPad as well as its gamble on a radical new Windows 8 interface. The company is betting that tablets with desktop-class operating systems can lead the market and is shipping the same interface even for non-touch hardware.



By Electronista Staff
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Comments

  1. joecab

    Fresh-Faced Recruit

    Joined: Apr 2004

    +9

    wow

    As a young Apple fanboy, I always dreamed this day would come ... *snif*

  1. SockRolid

    Forum Regular

    Joined: Jan 2010

    +9

    XP is still "good enough"

    If XP was "good enough" through the whole Vista Era, then Windows 7 will be "good enough" for the next 10 years. Windows 8 won't offer anything new, other than a layer of multi-touch GUI on top of the same old thing. A quick and dirty hack. Reminiscent of Windows 3.1/95/98/Me: a big heavy GUI running on top of DOS.

    And why will XP remain "good enough" for the next decade? Because it was the last version of Windows to offer consumers any real technological advance. It incorporated the NT Kernel. Fewer Blue Screen of Death (tm) experiences.

  1. Sosa

    Senior User

    Joined: Feb 2002

    +10

    I still can't believe Apple is now making much mor

    Quality has been rewarded. Apple fan since the 90s.

  1. johncarync

    Fresh-Faced Recruit

    Joined: Oct 2002

    +3

    Wanna bet?

    "The company is betting that tablets with desktop-class operating systems can lead the market."

    Umm...hey Microsoft, I think you've already lost that bet. Tablets with desktop-class operating systems have been available for years already. It was only when Apple released a tablet with a smartphone-class operating system that tablet sales took off. You sure you still want to put money on the desktop-class tablet idea?

  1. viktorob

    Fresh-Faced Recruit

    Joined: May 2011

    +1

    Ballmer has to put his feet in the ground

    Or some one at microsoft is playing jokes at Steve Ballmer of Steve doesn't have his feet in the ground since he keeps insisting that windows is selling like hotcakes.. well, we better say like ipads...
    I'm a very happy apple user, but I use windows XP at the office, but I'm supporting Vista and Windows 7 and I must say it a pain in the a$$... XP is the most decent OS from Microsoft, Vista and 7 is the same XP but they moved or hide everything just to make it look different. Just look for the device manager, it is the same DLL as the old XP, you just have to look more deeply to get to it. To unhide system folder, you have to go to different levels of menus and guess under which category is hiding that control panel. Many companies are migrating to Windows 7 because Microsoft does not gives support for XP anymore, not because Windows 7 is better.

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