Microsoft's profits drop for first time in 23 years

It goes to show that no company is truly recession proof. Microsoft is reporting that sales have fallen for the first time in 23 years. According to numbers released by Microsoft sales have fallen 6% year over year.

What can be cited for the drop in MS sales? Apparently netbooks are one of the major contributing factors. Consumers are buying cheaper products during these hard times and there are many netbooks that sell with a Linux flavor installed as opposed to Windows variants.

Blame can also be attributed to Vista's poor demeanor in the market place as consumers continue to look negatively at the operating system. Consumers are also probably holding out too for the much anticipated Windows 7 that is receiving great praise for its improvements over Vista.

At the end of the day Microsoft will still continue on, while not the best quarter for the company, they will rebound and remain a strong competitor in the market place for decades to come.

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"Consumers are buying cheaper products during these hard times and there are many netbooks that sell with a Linux flavor installed as opposed to Windows variants."

I haven't yet met one 'average Joe' user who would save on the OS (Windows). CPU - yes, RAM - yes, HDD - yes. But switch on his laptop and be greeted by the evil Penguin with no idea how to even login? Never.

"Blame can also be attributed to Vista's poor demeanor in the market place as consumers continue to look negatively at the operating system." Based on my humble experience, there's no real negativism amongst the 'average Joes' I know. The top reason they aren't switching to Vista is that they run XP and are perfectly fine with it. Those who are purchasing a new computer have heard or have been told they need to invest more in hardware in order to get good performance, and since they have years of experience with XP they just say 'no, thanks'. All people I've known to be prejudiced against Vista are now running Vista and are really happy with it. There's also a real minority which have been scared off, based only the usability changes which made them think they would need to learn a new OS. My $0.02.

Ultimately, Microsoft's products guide the market forward to a great extent -- both software and hardware, so if they do poorly it's bad for all of us.

At the end of the day Microsoft will still continue on, while not the best quarter for the company, they will rebound and remain a strong competitor in the market place for decades to come.

Hang on a second... That's not journalism in any sense.

You don't know that MS will rebound and remain a strong competitor for years to come. Yes, I agree that it's likely, but you have written it as though it's undisputable fact, based on some divine journalistic source laid out before you. It was a great article until you added that - then it just smacked of wistful childishness.

SniperX said,
Hang on a second... That's not journalism in any sense.

You don't know that MS will rebound and remain a strong competitor for years to come. Yes, I agree that it's likely, but you have written it as though it's undisputable fact, based on some divine journalistic source laid out before you. It was a great article until you added that - then it just smacked of wistful childishness.

True, it's more prophetic than journalistic.

The recession will take its toll on any company even Microsoft, still, nearly $3 billion in profit for the quarter is not bad at all.

Scutley said,
please tell me why is their stock up nearly 10% right now.


Because the decline is LESS then what was expected, which in stock world means thats a good thing

Ender2070 said,
WOOT!!! I was waiting for this day for a LONG time!

Finally people are getting it - Microsoft is crap.


People are buying less of EVERYTHING... has NOTHING to do with MS... even TV makers, PC (I include Apple in this because its a personal computer) makers and other tech companies are dropping overall

Ender2070 said,
WOOT!!! I was waiting for this day for a LONG time!

Finally people are getting it - Microsoft is crap.

Wow, all you can do is bash MS and then provide no valid information? Its not that MS is crap...EVERYONE is having issues with the economy. Get a clue....

Avee said,
Windows 7 Build 7100 has been released on some Microsoft Private Site (Lol) and I got it. It rocks11


Uh good for you? whats that have to do with money?

I dunno, is it? People can't go without food but they can live with holding on to their older PC hardware for another year if they have to.

Actually they are, or at least tried to make it look like they were when they took the double cheese burger off the dollar menu replacing it with virtually the same thing but without 1 slice of cheese called the mcdouble and now having the real double cheese burger cost like 20 cents more.

DigitalDude said,
Actually they are, or at least tried to make it look like they were when they took the double cheese burger off the dollar menu replacing it with virtually the same thing but without 1 slice of cheese called the mcdouble and now having the real double cheese burger cost like 20 cents more.

wow phd on burgers.

gianpan said,
wow phd on burgers.

Heh not really just happend to know this example of Mcdonalds being affected just like Achal wanted to know

Guys, Apple made their money with iPod and iPhone and not with computers. So comparing Microsoft to Apple here is irrelevant.

Microsoft is still one the only five tripple A (AAA) corporates left in the US, and I am afraid Apple is not on that list.

Microsoft
Johnson & Johnson
Exxon Mobil
Pfizer
Automatic Data Processing

What does the AAA corporates have to do with anything? We're discussing a profit report here, not measuring e-penises by bringing up the history of companies. Besides, I believe some bring up Apple because of the leading sentence in this post. Without that, it wouldn't be as called for at least.

Triple A rating does nothing to do with the history of the companies. It shows the financial health and strength of Microsoft.

ricknl said,
Guys, Apple made their money with iPod and iPhone and not with computers. So comparing Microsoft to Apple here is irrelevant.

Microsoft is still one the only five tripple A (AAA) corporates left in the US, and I am afraid Apple is not on that list.

Microsoft
Johnson & Johnson
Exxon Mobil
Pfizer
Automatic Data Processing


MS bullies competitors with it's OS monopoly, while Apple and Linux innovate. I know who would get my bet for future prosperity.

liberatus_sum said,


MS bullies competitors with it's OS monopoly, while Apple and Linux innovate. I know who would get my bet for future prosperity.


Uhh Microsoft? That's like saying Exxon depleates natural resources and wind is the way to go for everything, so lets invest in wind!... jus because it sounds good, doesn't mean it will make money anytime soon

liberatus_sum said,


MS bullies competitors with it's OS monopoly, while Apple and Linux innovate. I know who would get my bet for future prosperity.

Linux innovates? Really? It's good and solid...but innovative? Linux, right? The one that tries to appeal to the home user by keeping Gnome as old-school Mac OS as possible, and keeping KDE a blurry photocopy of the latest version of Windows?

liberatus_sum said,


MS bullies competitors with it's OS monopoly, while Apple and Linux innovate. I know who would get my bet for future prosperity.


Yea, big bullies and Apple is REALLY innovative. No video recording on the iPhone..no copy/paste...and a lot of other stuff. And MS doesnt force anyone to buy their OS. Their products are good, why people buy them. And at the time when MS was starting, there were no one to compete with them so EVERYONE BOUGHT MS PRODUCTS. Why do you think they are the standard for most companies/users?

I honestly just think its how the recession is hitting large businesses and their desire to upgrade their MS products. MS released Windows ME without taking a dive like this, so I think it's just economic reasons.

I agree, PG. With businesses having slower credit opportunities right now it probably would be difficult at best to upgrade when you're not sure if you can even finance the process.

slippery said,
IMO - its due to Vista, plain and simple.........

Probably a mixture of reasons. Vista and competition from Macs / Linux netbooks being the primary reasons. No doubt the patent troll will be suing more Linux based products in the future.

liberatus_sum said,
Probably a mixture of reasons. Vista and competition from Macs / Linux netbooks being the primary reasons. No doubt the patent troll will be suing more Linux based products in the future.

Absolutely fantastic job ignoring the posts about how slow sales are due to businesses tightening their budgets, and the part where Mac sales are down.

/apple's suing palm what now?

liberatus_sum said,
Probably a mixture of reasons. Vista and competition from Macs / Linux netbooks being the primary reasons. No doubt the patent troll will be suing more Linux based products in the future.

Patent troll? another funny from you. Apple is a patent troll as well and they even lost a patent lawsuit.

Apple fined $19m in 'Predictive Snooping' case
http://www.reghardware.co.uk/2009/04/24/apple_opti_ruling/

Again, get a clue dude

Yup. Apple's increase in phone and media player sales is hurting Microsoft's operating system sales. What, what?

GreyWolfSC said,
Yup. Apple's increase in phone and media player sales is hurting Microsoft's operating system sales. What, what?

good point...lol at offroadaaron

offroadaaron said,
Mac are obviously hitting back and taking the MS profits, that and the stupid give a bum a PC ad.... continue....

The bum ad wasn't real. It was done by some clueless Apple tools. Sorta like...you. You fall off your four-wheeler and hit your head or something?

Yup. Apple's increase in phone and media player sales is hurting Microsoft's operating system sales. What, what?

If a consumer prefers an expensive iPhone, there's not as much in the pocket left to upgrade to Vista. There's a competition for money, a limited resource, going on here.

You do know that Apples Mac sales were lower by 3% right? The only thing holding it profitable is their iPods and for a part the iPhone but even that is starting to trade lower (they're selling less of them with each quarter). Their Apple stores have also seen sales drop forcing them to fire 1,600 full time workers.

Don't let the Apple spin make it seem that they're doing great while everyone else is all down in the dumps.

GreyWolfSC said,
Yup. Apple's increase in phone and media player sales is hurting Microsoft's operating system sales. What, what?

Nothing to do with ME edition pars secunda aka vista then?

So funny to see people so fired up about, it all.

[sarcasm]I thought the bum ad was made by MS, wow this is a shock to me [/sarcasm]

And apple only posted a loss so people start buying more of there stuff, its all a scam :P

offroadaaron said,
So funny to see people so fired up about, it all.

[sarcasm]I thought the bum ad was made by MS, wow this is a shock to me [/sarcasm]

And apple only posted a loss so people start buying more of there stuff, its all a scam :P

Yeah, Apple seem to excel at pulling off a good scam. Good point.

VIVIsectVI said,
offroadaaron said,
So funny to see people so fired up about, it all.

[sarcasm]I thought the bum ad was made by MS, wow this is a shock to me [/sarcasm]

And apple only posted a loss so people start buying more of there stuff, its all a scam :P


Yeah, Apple seem to excel at pulling off a good scam. Good point.


you go, Save MS for the team..... I can hear a flock of sheep to the left of me, you should go join your friends

Yeah, that's what I call a business juggernaut. Staying hugely profitable for 23 years is no small task. They will bounce back with Win7.

They said "a flavor" of Linux, impying that there are many different distros and they aren't sure which one will be on there on a given Netbook.

liberatus_sum said,
Yes, abusing a monopoly can work wonders for the suppression of competition.

So can having mediocre, directionless competition.

liberatus_sum said,
Yes, abusing a monopoly can work wonders for the suppression of competition.


Yes, and abusing regulation can do an amazing job of slowing innovation to a crawl.

liberatus_sum said,
Yes, abusing a monopoly can work wonders for the suppression of competition.

boohoo...just because no one else can top MS is nothing to cry about. 23 years is impressive period...If Apple had that big of a streak, then i would say the same thing.

You can't really blame Vista for MS's drop in profits.. We're in a global recession, EVERYONE'S profits are down, and will be for a while yet. Windows 7 isn't going to be some magic bullet that swells MS's coffers with gold again. People just can't afford to upgrade computers at the moment, same for businesses.

majortom1981 said,
Your comment would make sense until you look at apples financials.

Yea, guess all those false statements they let out had nothing to do with them making a profit...not to mention their fanboy reporters that will repeat whatever they tell them.

majortom1981 said,
Your comment would make sense until you look at apples financials.

A gigantic chunk of Microsoft's sales are in the corporate world. I wonder how many of them see new PCs as a luxury expense right now.

MioTheGreat said,
A gigantic chunk of Microsoft's sales are in the corporate world. I wonder how many of them see new PCs as a luxury expense right now.

Exactly. We were going to replace 350 systems this year but have put that on hold. The company I work for is kinda small but I know people at larger companies doing the same thing.

Apple is geared towards the college students who want to keep in the "cool" looking trend. They buy Macs with student loans or grants...so they have the money to buy them.

Apple managed to make profits cuz it's got people/fans w/e, willing to pay that 36% margin on it's iHardware.

Yet, and this got little news, Apple fired 1,600 workers in it's stores which have seen profits down. mac sales are down, iPods are still the only thing holding it up, iPhones are selling less and less with every new quarter since their high back in Q4 of last year.

Sure, Apple posted good numbers this time, but will it hold? If things don't turn around anytime soon even Apple will see a bigger hit to it's numbers next time.

If a student is really smart they know that carrying around a Mac is merely a desperate attempt to look cool when in reality you're just a slave to a corporate logo.

majortom1981 said,
Your comment would make sense until you look at apples financials.

Huh? Apple's computer sales were down. Less computers sold, less Macs. Less computers sold, less Windows.

techbeck said,
Apple is geared towards the college students who want to keep in the "cool" looking trend. They buy Macs with student loans or grants...so they have the money to buy them.

If anyone knows some of these affluent students get them to PM me cause im selling my iMac...
NO-ONE wants it for a measly €700 (half new price) and its only about 8 months old

FloatingFatMan said,
People just can't afford to upgrade computers at the moment, same for businesses.

Most of the People don have to upgrade their hardware caz they already have at least 1GB Ram, 128MB agp, 2GHZ processor. So...upgrading to Windows won't be big fact but yea i don't completely ignore your words.

Faisal Islam said,
Most of the People don have to upgrade their hardware caz they already have at least 1GB Ram, 128MB agp, 2GHZ processor. So...upgrading to Windows won't be big fact but yea i don't completely ignore your words.


Specially when it comes to Win7, the above specs are good enough to run it very smooth imo. And on the other end, RAM is so cheap, so upgrading just that to 2GB or more is nothing big today.

techbeck said,
Yea, guess all those false statements they let out had nothing to do with them making a profit...not to mention their fanboy reporters that will repeat whatever they tell them.

Perhaps the fact they make better hardware / software is a factor? I know the truth is often hard to swallow, but this is reality.

Apple makes amusing adverts, and for the most part they are true.

liberatus_sum said,
Perhaps the fact they make better hardware / software is a factor? I know the truth is often hard to swallow, but this is reality.

Apple makes amusing adverts, and for the most part they are true.

Maybe a reality for you. Unfortunately, the rest of the world doesn't seem to share your delusion.

liberatus_sum said,
Perhaps the fact they make better hardware / software is a factor? I know the truth is often hard to swallow, but this is reality.

Apple makes amusing adverts, and for the most part they are true.


Apple doesn't make computer hardware. They're an assembly line.

liberatus_sum said,
Perhaps the fact they make better hardware / software is a factor? I know the truth is often hard to swallow, but this is reality.

Apple makes amusing adverts, and for the most part they are true.

Better hardware and software? Hahahaaaaa, thanks for the laugh. The fact that they are more expensive doesnt make them better. Plus, most of Apples hardware is available on the PCs as well. The difference? Pricing. And yes, like someone else said..Apple doesnt make any hardware...another false comment from you.

Apple makes adverts that BASH the competition and that is the only way they can get ahead. They have F'tards like Jim Goldman reporting FALSE information to get ahead. Their whole marketing campaign is working because people will believe anything the media tells them...period. And dont get me started on their "innovations" most of which were already thought of before.

FloatingFatMan said,
You can't really blame Vista for MS's drop in profits.. We're in a global recession, EVERYONE'S profits are down, and will be for a while yet.
...

You mean, everyone except Red Hat?

I know a number of people will be moving from XP to 7, myself included.

Nothing against Windows Vista really. It's just, by the time I got a new computer, 7 was / is just around the corner so...

majortom1981 said,
They should be fine once windows 7 comes out. It seems alot of people will be buying windows 7.


After the vista debacle it's likely most will take a wait and see approach. The persons giving the beta glowing reviews are mostly fanboi's and as such should be treated with many grains of salt.

Lets hope MS make the same mess with windows 7 so Linux has a chance to flourish in the netbook market.

liberatus_sum said,
After the vista debacle it's likely most will take a wait and see approach. The persons giving the beta glowing reviews are mostly fanboi's and as such should be treated with many grains of salt.

Lets hope MS make the same mess with windows 7 so Linux has a chance to flourish in the netbook market.


Lol, Linux will never flourish in the desktop, laptop or netbook market. People would just keep holding on to XP rather than downgrade their applications. IT admins wouldn't want to administrate a Linux network either. It's much more time consuming to admin Linux desktops than it is to admin Windows desktops.

liberatus_sum said,
Lets hope MS make the same mess with windows 7 so Linux has a chance to flourish in the netbook market.

Yes. Because the only way Linux can flourish is if it has no other competition. That's why you want Windows to fail, right? Because you believe, deep down, that Linux can't win on its own merits.

Oh oh, or you think it has merit enough, but it can't win because The Man is keeping it down. Nevermind that Apple, also allegedly oppressed by The Man, still manages to make a bigger dent on the home market than Linux.

/complaining about Linux vs Windows is like complaining about computer monitors vs TV sets--their functions might be getting closer and closer, but they're still two completely different markets

A 10% Linux marketshare is failure?

Yes, it came out strong, but Microsoft's $15 pricing to push XP was successful for them.

Still I see no reason to paint a significant marketshare as "failure".

Must be a Redmond Distortion Field, too.

markjensen said,
A 10% Linux marketshare is failure?

Yes, it came out strong, but Microsoft's $15 pricing to push XP was successful for them.

Still I see no reason to paint a significant marketshare as "failure".

Must be a Redmond Distortion Field, too. ;)

10% marketshare on what? Netbooks? If so, yeah, I'd call 10% down from 23% last year a roaring success. Who's living in a distortion field, again?

VIVIsectVI said,
10% marketshare on what? Netbooks? If so, yeah, I'd call 10% down from 23% last year a roaring success. Who's living in a distortion field, again?

For Linux to have a 10% market on any client computing device is significant.

And it does even better in embedded and servers.

markjensen said,
For Linux to have a 10% market on any client computing device is significant.

And it does even better in embedded and servers.

Dropping 13% in just over a year is just as significant.

lol Windows 7. Windows is like pop music, Linux is still the underground and Mac is a certain genre. Personally I don't see anything great in windows 7 and windows XP works fine for me, but I don't particularly use Windows anyways, DOS 6.22 for me.

VIVIsectVI said,
Dropping 13% in just over a year is just as significant. ;)


The market is much larger now, and thus that 10% represents many more machines. Naturally windows will gain a big share because of its familiarity to users. Can you imagine a 10% market share in traditional laptops? Well netbooks will exceed and supplant that market soon enough.

liberatus_sum said,
The market is much larger now, and thus that 10% represents many more machines. Naturally windows will gain a big share because of its familiarity to users. Can you imagine a 10% market share in traditional laptops? Well netbooks will exceed and supplant that market soon enough.


Um...you're confused. In less than a year, they've dropped over half their marketshare in the netbook arena, and that will further plummet once Win7 is released. Pretty sad when you can't even give away a product, and people refuse to buy it, even when it's cheaper, during a recession.

If you think going from 23% to 10% in less than a year is a "huge win", I have some Cubs 2009 World Series tickets I'd like to sell you. Cheap.