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Microsoft reports steep fall in sales

Microsoft has released lower than expected sales figures before  the release of its much hyped Windows 8 operating system.

Figures for PC sales were not encouraging either as they contributed to the decrease of Windows revenue by 9 percent this quarter.  Sales of Windows did not increase as Microsoft prepares for its new product launch. The massive tech company is readying itself for an anticipated sale of  Windows 8 and Surface–two radical products that Microsoft hopes will reenergize its stalling performance. They will be released on October 26.

While touted as landmark releases for Microsoft as it tries to join the smartphone party, the company did not give any indication that both products will right away change its fortune . The company acknowledged that sales of Windows to businesses are slowing amidst the economic crisis the world is facing. Microsoft refused to comment on its outlook for  both products although it did mention it is “excited”  about the said launches.

Peter Klein, Microsoft’s Chief Financial Officer, did not answer the inquiries of Wall Street analysts how the new products will perform after launch.

A question thrown at him about why his company’s estimate for growth in the delivery of cost of goods is only at single digits if Surface, expensive as its is, will perform well, Klein simply answered: “We’ll see how it goes. Next question.”

The next question, which centers about the negative reviews Windows 8 is getting by potentially causing confusion on user interface, got a laconic response: “In the past, innovations delivered way more value, capability and usability.”

It seems Microsoft is taking a cautious approach to Windows 8 release, not overly optimistic while also not that discouraging in terms of sales figures perhaps.

Other divisions of the company reported positive growth during the same quarter, making the overall sales figures of the company flat each year. Microsoft Office sales increased by 1 percent, without counting some revenue deferrals for upgrades provided to the new products of Office 2010. The Office 2010 products will get upgrades to Office 2013 when this a new crop of Office 2013 launches in upcoming quarters.

The company’s Server and Tools division continued to fare better by tallying an 8 percent increase as companies around the world continuously demand for more updated Microsoft SQL Server product, which was launched in April. Ad revenue generated by Bing searches increased by 15 percent, while Xbox decreased by 1 percent due to slumping market for video games.

Market research firm Thomson Reuters expected Microsoft to generate $16.4 billion in sales. Microsoft managed to hit $16 billion during its first fiscal quarter.

The Redmond-based tech company said that its net income dropped 22 percent or $1.4 billion for the said quarter.

The company’s chief executive Steve Ballmer said he was hopeful for the company’s future as he promised a “new era” as it battles in the lucrative mobile computing market.

Microsoft’s acquisition last year, Skype, recorded a 58 percent increase in total calls logged during the same quarter.

source: cnn

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