Microsoft blames poor Windows sales on PC slump

Fingers Thai flood whipping boy and netbook decline

Microsoft has released its quarterly results, and reports that Windows revenues are down 6 per cent when compared with the previous quarter.

For the last three months, Microsoft not only saw its Windows division revenues fall 6 per cent, but its business division grew just three per cent despite strong sales of Lync, Exchange, and SharePoint. This is compared to 11 per cent growth in its server and tools group, with online services up 10 per cent and the entertainment division seeing revenues climb 15 per cent to $4.24bn, with Xbox Live subscriptions up by a third.

Microsoft had warned that PC sales were going to be worse than expected, down about 2 to 4 per cent in its estimation, in part due to equipment shortages following last year’s floods in Thailand. These problems will last at least until the next quarter, the company said in an earnings call with analysts and reporters on Thursday.

But it wasn’t all down to the floods, Microsoft’s GM of investor relations Bill Koefoed explained. Customers were, as he put it, faced with “competing form factors” – a polite way of saying that tablets are selling like hotcakes and Redmond still hasn’t a good-enough OS for that market. The collapse in popularity of netbooks was also blamed, with the systems falling from 8 per cent of the total PC market last year to just 2 per cent today.

“We are pleased with our results this quarter, despite the decline in PC sales,” said Microsoft’s CFO Peter Klein. “We are well positioned for future growth.”

But then again, what else would you expect him to say? ®