Still going strong
With rivals Apple and Google continuing to hog the headlines - especially in the mobile space - Microsoft reminded the world it still brings plenty to the table with its latest quarterly earnings.
Revenues were up on the same period a year ago, but by how much depends on whether you include advance sales of Windows 7 in that quarter's results. The table below covers both scenarios.
Windows 7 continues to do well, with many businesses that had been reluctant to adopt Vista now upgrading from the venerable XP. Microsoft said nearly 90 percent of enterprise companies have started their formal migrations to Windows 7. Microsoft's other cash-cow - Office - is also doing well, with sales of Office 2010 50 percent ahead of Office 2007 at the same period after launch.
But the big variable in Microsoft's fortunes is its entertainment and devices division, which encompasses Xbox and Windows Phone 7. "We are enthusiastic about the consumer response to our holiday lineup of products, including the launch of Kinect. The 8 million units of Kinect sensors sold in just 60 days far exceeded our expectations," said Peter Klein, CFO at Microsoft.
There seems to also be a halo effect (no pun intended) for the rest of Xbox from the launch of Kinect. Microsoft sold a record 6.3 million Xbox consoles in the last quarter - a record - and Xbox Live membership was up 30 percent to 30 million active members. Other positives include Xbox Live deals with the likes of Netflix and Hulu.
Microsoft seems to be the ascendant console-maker right now, and revenues at the entertainment and devices division grew by 55 percent and have already already topped a billion dollars with only half of the financial year gone.
But the absence of WP7 from the highlights reel speaks volumes, or lack of. "Windows 7 continues to be the fastest-growing operating system in history, and our recent System on a Chip announcement demonstrates our commitment that Windows will have the power and flexibility to run everywhere and on every device," said Kevin Turner, COO at Microsoft.
Clearly uptake of WP7 phones hasn't been as rapid as Microsoft will have hoped. There was some muted talk about how it had got off to a "solid start" and manufacturers had purchased over two million licenses, but no indication of what proportion of those had actually been bought by end-users. But apparently user satisfaction is very high and there are now over 24,000 registered developers, so this one is set to be a slow-burner.
Here's the outlook. As you can see, Microsoft expects the entertainment and devices division to continue to grow rapidly.
