Newsletters
News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Microsoft/Windows
Tame your scariest paperwork. Find Out How
Average Rating:
Rate this article:  
Beneath the Surface, a Difficult Q4 for Microsoft
Beneath the Surface, a Difficult Q4 for Microsoft

By Seth Fitzgerald
July 19, 2013 10:32AM

    Bookmark and Share
The Surface was seen as a way to offset the market shift from PCs to tablets. However, in the December and March quarters, Microsoft was only able to sell 900,000 Surface tablets, which instead of bridging the revenue gap expanded it. Even the recent $150 drop in price for Surface tablets is unlikely to boost sales enough.
 



Microsoft's Surface tablet failure combined with declining industry PC sales resulted in the company missing expectations with its fourth-quarter financial report, which drove its share value down by more than 6 percent.

Microsoft CFO Amy Hood sought to calm investors by citing the technology giant's recent reorganization.

"We know we have to do better and this is one reason we made the strategic and organizational changes last week," Hood said in a conference call. "We are confident we are moving in the right direction."

During Q4 Microsoft's revenue grew by 10 percent, reaching $19.9 billion, although a $900 million charge for the Surface RT hurt that growth.

Where It Went Wrong

Computer sales have taken a turn for the worse for most PC manufacturers, and that decline has affected Apple, Intel, and of course, Microsoft. While Microsoft does not manufacture traditional PCs, the decline affected its software and accessory sales.

The Surface was seen as a way to offset the market shift from PCs to tablets. However, in the December and March quarters, Microsoft was only able to sell 900,000 Surface tablets, which instead of bridging the revenue gap expanded it.

Even the recent $150 drop in price for Surface tablets is unlikely to boost sales enough. Hood said she remained hopeful the Surface would gain traction.

"We believe this price decrease will accelerate Surface RT adoption and position us for better success," she told investors and analysts.

Unearned revenue was also a big factor in the disappointing Q4 report, due to Microsoft holding numerous long-term deals that will not yield any income for a while. Those deals are valued at $22.4 billion.

The Reorganization Solution

In an e-mail sent to employees last week, CEO Steve Ballmer announced the largest reorganization of Microsoft in more than a decade. The changes Ballmer enacted include a stronger focus on developing hardware and services as well as more attention on the mobile computing division of Microsoft.

The new Microsoft organization will be broken into Operating Systems Engineering, Devices and Studios Engineering, Business Development and Evangelism, and Cloud and Enterprise Engineering. All of the new business units have a primary goal of "working to transition this business into the modern era," Hood said.

If Microsoft is able to roll out new mobile products on a regular basis it will succeed, but if it stays fragmented with its execution it will continue to struggle in the current market. Another major concern for analysts and investors is Microsoft's execution of Windows 8, which placed more emphasis on touch controls that made the user experience awkward on a traditional PC.

No matter what ends up happening, Ballmer and the rest of the Microsoft executives have a long road ahead of them to compete in the current consumer electronics market.
 

Tell Us What You Think
Comment:

Name:



Salesforce.com is the market and technology leader in Software-as-a-Service. Its award-winning CRM solution helps 82,400 customers worldwide manage and share business information over the Internet. Experience CRM success. Click here for a FREE 30-day trial.


 Microsoft/Windows
1.   Lenovo Still in Small Windows Tablets
2.   How Chrome Eats Your Battery Life
3.   Are These Layoffs Best for Microsoft?
4.   Microsoft Axes Android Phones
5.   Microsoft Will Lay Off 18,000 Workers


advertisement
Review: Microsoft's Surface Pro 3
Is it a tablet and laptop replacement?
Average Rating:
Bing Lets Europeans Be 'Forgotten'
Following in Google's footsteps.
Average Rating:
Microsoft Announces $199 Laptop
Taking on Google's Chromebooks.
Average Rating:


advertisement
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
34 European Banks Hit by Android-Skirting Malware
Criminals have been finding gaping holes in Android-based two-factor authentication systems that banks around the world are using. The result: 34 banks in four European countries have been hit.
 
New Web Tracking Technologies Defeat Privacy Protections
Recently developed Web tracking tools are able to circumvent even the best privacy defenses, according to a new study by researchers at Princeton and the University of Leuven in Belgium.
 
Juniper DDoS Solution Aims at High-IQ Networks
In the face of more complex attacks, Juniper Networks is boosting its DDoS Secure solution to help companies mitigate the threats with more effective security intelligence throughout the network fabric.
 

Enterprise Hardware Spotlight
Contrary to Report, Lenovo's Staying in Small Windows Tablets
Device maker Lenovo has clarified a report that indicated it is getting out of the small Windows tablet business -- as in the ThinkPad 8 and the 8-inch Miix 2. But the firm said it is not exiting that market.
 
Seagate Unveils Networked Drives for Small Businesses
Seagate is out with five new networked attached storage products aimed at small businesses. The drives are for companies with up to 50 workers, and range in capacity from two to 20 terabytes.
 
Another Day, Another Internet of Things Consortium Is Born
In the emerging Internet of Things, zillions of devices will be talking to each other. Samsung, Intel and Dell just formed a consortium to ensure each thing can understand what others are saying.
 

Navigation
NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | Small Business | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.