Windows PC sales dip, revenue jumps

By SiliconIndia   |   Friday, 29 April 2011, 08:25 Hrs
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Bangalore: Microsoft recorded a profit of 31 percent to $5.23 billion for January - March quarter and increase in revenue of 13 percent to $16.43 billion in the third quarter which ended on March 31 2011 due to strong sales in Office and Xbox products. However, it registered a dip in its Windows PC sales.

In spite of the rise in profit and growth in its revenue, sales for Windows PC sales fell 4 percent from the year-earlier quarter to $4.45 billion. The record breaking sales of 350 million licenses of Windows 7 also could not save its dipping numbers.Two market research firms, International Data and Gartner, said global PC shipments in the first three months of the year fell 3.2 percent and 1.1 percent respectively.

The growth of Microsoft was driven by products like Office, Kinect video game, Xbox 360 game and Xbox Live. Hence the entertainment sector seems to be doing well for Microsoft. Revenue in the entertainment and devices division increased to 60 percent to $1.94 billion.

The Office applications provided a big pick up with 21 percent increase in revenue to $5.25 billion during the quarter.The feeble growth of its traditional personal computers is affected by the emergence of tablet, iPhones, and iPad. The introduction of tablet has dampened the demand of consumers for PC's.

Microsoft reported that it witnessed a 40 percent decline in the sale of its netbooks. Netbook is a small, lightweight and inexpensive laptop computer.

The Bing search engine and MSN web portal incurred a loss of $726 million in the quarter as Microsoft continued to step up efforts to challenge Google in Internet search. The unit has now lost $7 billion in four years. The tie up with Yahoo has still not fetched the desired result for Microsoft and it is waiting for its investment to pay off.

According to Thomson Reuters, Microsoft registered a 31 percent increase in fiscal third-quarter net profit, reporting $5.2 billion, or 61 cents per share, compared with $4 billion, or 45 cents per share, in the year-ago quarter. Microsoft's shares declined 1.7 percent in after-hours trading to $26.25, after closing at 4 p.m. at $26.71.

The jump in the revenue comes as very good news across Microsoft. But in order to bring its windows division in track it has to make new strategies and innovation to capture the market again.

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