Microsoft's Windows OEM revenues dropped 7 percent, but that's good news

On Thursday, Microsoft announced solid financial results for its first fiscal quarter of 2014 (Q3 2013 for the rest of us) with $18.53 billion in revenues and $5.24 billion in net income. However, the company did note that Windows OEM revenues went down by seven percent for the quarter.

That might sound like bad news, but the truth is three months ago, Microsoft predicted that the amount of money it would get from OEMs would go down in the mid-teens, percentage wise. In the company's conference call with analysts Thursday, Microsoft's chief financial officer Amy Hood said that it is seeing "signs of stabilization in the business segment" in terms of PC sales which likely helped out with revenues.

Microsoft's own slide shows that Windows OEM Pro revenue went up by 6 percent in the last quarter, but non-Pro revenue went down by 22 percent, which Microsoft says was still better than expected.

The news comes on the heels of reports from IDC and Gartner that showed PC shipments declining in the last quarter but not as badly as first predicted. While it's still too early to say that the PC industry is improving, all of this news is encouraging and could add up to good news for Microsoft, and its Windows business, in the long run.

Source: Microsoft | Image via Microsoft

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12 Comments

theyarecomingforyou said,
It's not good news for the company, it's just not as bad as was expected.

That depends, if you look at the chart even with the 7% drop it actually was a bit higher than last quarter which saw an even bigger drop in the PC market iirc. The key here is the fact that Pro grew 6% and for the 2nd time in a quarter. Pro costs more than non-pro which was down, so the difference was actually covered by the higher price tag of Pro. The chart also hints at the market being stable though we'll have to see how holiday sales went for PCs I think the data shows the decline is close to ending, probably a quarter or 2 of flat sales before it goes up again.

theyarecomingforyou said,
It's not good news for the company, it's just not as bad as was expected.

Yes it is. Big companies make predictions so they can plan accordingly for the future. If something comes in better than predicted, they have more money than they thought they would and I'd say that's a good thing.

Or because Pro (either retail or volume - this is dealing with the Pro SKUs in both channels) offers the most in-demand features compared to Core? Remember, starting with Windows 8, the myriad of SKUs in the OEM and business channels is down to just five each - Core and Core N, Pro and Pro N, and ProWMC. Pro and ProWMC are likely taking bites out of Enterprise in the business channel - what really does Enterprise offer business users that Pro lacks? (Let's be honest - WindowsToGo is a niche-outlier feature; how many Enterprise users actually use it?)

The signs of the end are clear yet they are still faffing about with their mobile strategy and delivering overpriced RT crap and a crippled phone OS. 10 years from now Microsoft will be just a memory because they tried to be like apple and overcharging for stuff instead of providing real value. Probably wont be missed by anyone.

efjay said,
The signs of the end are clear yet they are still faffing about with their mobile strategy and delivering overpriced RT crap and a crippled phone OS. 10 years from now Microsoft will be just a memory because they tried to be like apple and overcharging for stuff instead of providing real value. Probably wont be missed by anyone.

Lol, way to ignore facts.

efjay said,
The signs of the end are clear yet they are still faffing about with their mobile strategy and delivering overpriced RT crap and a crippled phone OS. 10 years from now Microsoft will be just a memory because they tried to be like apple and overcharging for stuff instead of providing real value. Probably wont be missed by anyone.

wow, you know I remember back in the 90's when people said the SAME THING ABOUT APPLE! Everyone thought by the late 90's early 2000's Apple would just be a memory.... guess what markets change, things happen, MS could kill apple in the next decade again... Google could buy Apple, heck we have no idea what could happen

Oh, geeze. Numbers rise and fall all the time. It's not an indicator of anything other than a fluctuating market, in this case stabilization after many just spent upgrading to 7.

Considering all the negative press this past year the numbers are pretty great. They need to step it up though, especially in fixing their wireless issues.

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