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Microsoft Makes Q4 Profit of $6 B; Strong Windows Revenue

By - Source: Microsoft | B 27 comments

Windows division enjoyed revenue increase of 24 percent from 2011's fourth quarter.

Microsoft has announced its financial results for 2012's fourth quarter, with strong performance in its Windows division.

It generated a profit of $6.38 billion, or 76 cents a share, on revenue of $21.46 billion during the last quarter, with its phone division generating revenue of $546 million. The former figure represents a decrease when compared to the $6.62 billion, or 78 cents a share, earned during the same quarter in 2011. The figure is also slightly below Wall Street estimates of 77 cents a share on revenue of $21.53 billion.

The Windows division generated revenue of $5.88 billion, an increase of 24 percent year on year. Since its late October launch, Microsoft has sold over 60 million Windows 8 licenses.

"Our big, bold ambition to reimagine Windows as well as launch Surface and Windows Phone 8 has sparked growing enthusiasm with our customers and unprecedented opportunity and creativity with our partners and developers," said Microsoft CEO Steve Ballmer. "With new Windows devices, including Surface Pro, and the new Office on the horizon, we'll continue to drive excitement for the Windows ecosystem and deliver our software through devices and services people love and businesses need."

Elsewhere, the Server & Tools business that consists of products including SQL Server and System Center posted revenue growth of 9 percent to $5.19 billion. The Business Division, which includes its popular Office suite, generated $5.69 billion in revenue, a decrease of 10 percent.

The Entertainment and Devices Division, which includes the Xbox lineup, experienced a revenue decline of 11 percent to $3.77 billion. During 2012's Q4, Microsoft sold 5.9 million Xbox consoles, which is a drop of 28 percent. Bought for $8.5 billion in 2011, Skype experienced a 59 percent increase in call minutes.

The Online Services Division, which includes online advertising generated by web entities such as its Bing search engine, increased its revenue by 11 percent to $869 million.

 

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  • 8 Hide
    CaedenV , January 25, 2013 7:13 PM
    it all seems to make sense. Bing and Skype have seen huge improvements over the last year. Win8 may not be a huge sales point to enthusiasts, but all of the OEM orders for the new OS was no dobut a nice cash cow. All the while the xBox is just getting older by the day, and fans are already saving their pennies for the NextBox.
  • -6 Hide
    memadmax , January 25, 2013 7:13 PM
    Would have been alot more if they made metro optional and left the start bar alone...

    I know it would have been where I work at: 250 licenses easy...
  • -4 Hide
    ravinmachine , January 25, 2013 7:15 PM
    And most of that Windows revenue came from people buying up what's left of Windows 7 :) 
  • 2 Hide
    zorky9 , January 25, 2013 7:28 PM
    ravinmachineAnd most of that Windows revenue came from people buying up what's left of Windows 7

    But most of "what's left of Windows 7" had a free upgrade path to W8, so it wasn't really a case of this or that. A small part of why they got to 60 million licenses was due to the cheaper upgrade cost to W8 Pro. The smaller margin compared to previous upgrades was offset by the volume.
  • 7 Hide
    apache_lives , January 25, 2013 7:58 PM
    Poor Windows 8 haters must be furious
  • 1 Hide
    jhansonxi , January 25, 2013 8:38 PM
    CaedenVAll the while the xBox is just getting older by the day, and fans are already saving their pennies for the NextBox.
    I'm more interested in Valve's box/platform. They're promising it will be more open.
  • -1 Hide
    ojas , January 25, 2013 8:44 PM
    Damn. Now this will be there excuse to keep metro forever.

    OR WILL IT BE?

    :p 
  • -3 Hide
    Anonymous , January 25, 2013 9:08 PM
    All those businesses that bought windows 8 computers and installed enterprise windows 7 on them! Yes pay the M$ tax and then install the more productive windows 7, no touch screen madness for the back office! the only people that need windows 8 are the people who say "would you like fries with that" for a living! The content creators that are using windows 7 will stay with windows 7, then when windows 7 expires they will move to Linux! Most of the 60 million windows 8 licenses are waiting to be installed on the OEM's servers in the basement, and all that remains of windows 8 on the business PCs is the sticker on the back or bottom that says windows 8!
  • 5 Hide
    d1212 , January 25, 2013 9:35 PM
    Windows 8 rules.
  • 1 Hide
    Soda-88 , January 25, 2013 9:39 PM
    UpgradeByDowngradeAll those businesses that bought windows 8 computers and installed enterprise windows 7 on them! Yes pay the M$ tax and then install the more productive windows 7, no touch screen madness for the back office! the only people that need windows 8 are the people who say "would you like fries with that" for a living! The content creators that are using windows 7 will stay with windows 7, then when windows 7 expires they will move to Linux! Most of the 60 million windows 8 licenses are waiting to be installed on the OEM's servers in the basement, and all that remains of windows 8 on the business PCs is the sticker on the back or bottom that says windows 8!

    I feel bad for bosses of 'content creators' who don't know how to use Desktop in Windows 8 and customize the UI to their likings, or at least have tech support who can make Windows 8 identical to 7 by installing Classic Shell (which has the option to boot directly to desktop and to disable active corners) on every Windows 8 PC in the office.
  • 3 Hide
    DRosencraft , January 25, 2013 10:03 PM
    It's funny that all we were hearing from talking heads late last year was how the entertainment sector was doing amazing and was going to continue growing hugely, but the Windows business was dead and would be a complete drag on MSFT. Now it turns out to be the opposite. All the hate that was being piled onto Win 8 by so-called power users who couldn't seem to figure out that they were just being intransigent and stubborn about something that took on a bit of a different look. But it's too soon to celebrate. The challenge will be how Windows holds up once the price goes back up. Sales will slow once the price goes back to the MSRP levels, so it will be a challenge for them to keep up reasonable sales going forward.

    As for their other segments, Windows Phone 8 is a pretty good phone system (I've seen though don't own), so I hope it can gain better traction than it has. The Pro tablet could help them again being that it is a sector they have little existing exposure to, but it's hard to gauge where it will fit into the broader tablet market and if its bells and whistles will distinguish it enough from the rest of the market. And I do own an Xbox, but I have not been a great fan of their games library in general, and have not heard particularly encouraging news about their next system, so I would be hesitant to putting too much hopes on that, particularly in the next couple quarters since any new Xbox won't release until the end of the year, and you're not likely to see any blockbuster games for the Xbox 360 until at least around E3 in June.

    No doubt, they had a good quarter, but there are headwinds in their future.
  • -2 Hide
    tomfreak , January 25, 2013 10:10 PM
    yet the market prove again. PRICE is a very important factor.

    Microsoft doesnt seems to realize this thing and decide to rise the win8 price to a retarded $199 level.
  • -5 Hide
    diddo , January 25, 2013 10:24 PM
    windows division + 24% over previous year, at the launch of w7 it was +70% over previous year
    for the first time revenues decreased after a windows release
    w8 user base is stuck at 2,17%, see netapplications
    surface preorders were cut by half
    surface pro is just anoter ultrabook, and ultrabook fad is already gone
    ms is dead, it was able to be apparenly live in this quarter only due preexisting update agreements that allowed them to stuff the supply chain with 60m of license that are going to never be sold to end users, sperading the disease to the whole pc industry, just look to what is happening to dell now.
    in a matter of months gravity will be back in, the too big to fail card ms is playing will no longer work with any businness parthner, and it will be embarrassing for ms fanboys and redmond pr to explain whit their beloved empire is crumbling so fast, and condone the grievus damages it will do to the entire pc industry.
  • -1 Hide
    SneakySnake , January 25, 2013 11:26 PM
    memadmaxWould have been alot more if they made metro optional and left the start bar alone...I know it would have been where I work at: 250 licenses easy...


    install one of the start menu programs, they're like 5 MB
  • 6 Hide
    everygamer , January 25, 2013 11:56 PM
    I've been using Windows 8 since release, I've come to like it. The start button being gone doesn't bother me much as I still launch my apps from the task bar for the most part, and the search feature is pretty fast at pulling up other applications. Overall I don't feel my experience has changed much from Windows 7 to Windows 8 on my Desktop.

    I am interested in a Windows 8 tablet, but not until they get less power hungry x86 processors (Intel this is in your corner) so that we can have a Full windows 8 pro run for 8 to 9 hours on battery. I've used the Surface w/ attached keyboard and was pleasantly surprised at its usability. I'll stick with my Asus Transfer Infinity & HP Laptop until they get the Win8Pro tablets lighter /w better battery. A Windows 8 RT tablet is a waste of time in my book because I want full application support.
  • -3 Hide
    killerclick , January 26, 2013 12:16 AM
    apache_livesPoor Windows 8 haters must be furious


    I'm not, seeing how the Windows division revenue jump was 24%, but when Windows 7 came out, it was over 70% (source: http://online.wsj.com/article/SB10001424127887324539304578262190945581974.html) and the market agrees, since Microsoft's shares are down over 2%.

    Face it, Windows 8 launch and adoption is the worst in Microsoft's recent history. Vista had a higher adoption rate than Windows 8, how's that for comparison?
  • 5 Hide
    SchizoFrog , January 26, 2013 12:55 AM
    memadmaxWould have been alot more if they made metro optional and left the start bar alone...I know it would have been where I work at: 250 licenses easy...

    If your company adopts a new OS this early then the IT dept is run by idiots.
  • 3 Hide
    CaedenV , January 26, 2013 2:59 AM
    killerclickI'm not, seeing how the Windows division revenue jump was 24%, but when Windows 7 came out, it was over 70% (source: http://online.wsj.com/article/SB10 [...] 1974.html) and the market agrees, since Microsoft's shares are down over 2%.Face it, Windows 8 launch and adoption is the worst in Microsoft's recent history. Vista had a higher adoption rate than Windows 8, how's that for comparison?

    The problem with win8 is not the OS, or even the immature people who spend hours whining about having to do an extra click once a day, and how that eats too much of their time. The problem with win8 is that it is a touch oriented program, but there are not a lot of wanted touch oriented machines to put them on yet. Yes, you can use win8 on a standard desktop (I do) and it works fine, but it really shines on a touch capable device. Once kinnect for windows and Leapmotion come out later this year I think people will change their tune a little bit.

    The other paradigm shift in win8 that is not as obvious is the change in role of the OS. Windows has always been a graphical interface that translates the language of hardware into a usable UI. Windows still does this, but metro goes a step further. Metro is not so much about the new colorful boxey style of the interface, that is just marketing. Merto is about taking the same hardware translation of an interface, and making a services translation to an interface. The idea is that apps are merely templates which run on groups of data which may exist on your computer or the cloud, but different apps can interact with that data in different ways, or attach different meanings to the same data. The paradigm shift here is that in a traditional desktop application programs were islands which were supported by the OS. Metro then acts as a subway system of sorts which connects apps and services together by allowing different systems to interact with the same data.
    This is best explained with the contacts list and some of the baked in win8 apps. You connect the OS to Facebook, twitter, email accts, skype, etc. All of these contacts are then dumped into a single pool of information, and the system does it's best to consolidate the contacts for you. Then you go through and fix the remaining contacts, and you realize... you have just aggregated information from a bunch of different products and services into a single monolithic list of contacts. This pool of contacts is then available on a wide varieity of other programs such as twitter, chat, your WP8 device, and all of your MS web services. The OS (or I guess it is really your LiveID?) is providing a place to put information, and then your various programs interact with it in different ways. Your phone is looking at it one way, your email applications look at it another, the people hub looks at it another, etc. etc. etc. But you get the picture, the data is seperate from the program, and all programs potentially have access (with the user's permission) to this data.
    Right now developers are making the mistake of viewing metro apps as just square themed versions of desktop apps. They are tied into their own services, and they are not very dynamic at using all of the rich resources that metro can offer. But, if they changed their model to treat their program as a filter or modifier of information rather than a stand-alone program with its own private information, then we could get some really interesting and compelling apps. But it takes time to learn this new way of doing things, so it may be a little bit before we see apps really use what is available to them.

    Anywho, the point is that it makes sense why win8 is not taking off. It is not the interface that is bad, it is that hardware makers have not caught up to the new paradigm yet, and software makers have their own learning curve to catch up on. But that is understandable... look at the last time the paradigm was changed; Win95 caused all sorts of growing pains! It took YEARS for software developers to design around the new way on interacting with Windows, and it took a while for hardware developers to come up with computers with enough resources to run the interface properly without also being extremely expensive. Win8 is going through a similar crisis, but we are learning to deal with it much quicker than we did with win95, and so I bet that in a year people will really grow to enjoy what win8 brings to the table, and I think that windows Blue will also bring some improvements to metro to iron out some of the more legit complaints about the new interface.
  • 4 Hide
    Bloob , January 26, 2013 4:33 AM
    memadmaxWould have been alot more if they made metro optional and left the start bar alone...I know it would have been where I work at: 250 licenses easy...

    Start bar / task bar, is actually much much better in Win 8; it actually works well with multiple monitors.
  • 0 Hide
    mariusmotea , January 26, 2013 7:47 AM
    Phone division make more money from Android instead of windows phone, because of patents used in Android.
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