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Microsoft Sales Decline for First Time Ever

By - Source: Tom's Hardware US | B 28 comments

Microsoft's been caught on the same downward recession spiral.

It's been a tough year for the economy, and Microsoft wasn't immune to the effects of the recession.

Microsoft yesterday reported its first ever annual sales drop in company history. For the fiscal year ended June 30, 2009 Microsoft reported revenue of $58.44 billion, a 3 percent decline from the prior year. Operating income, net income and diluted earnings per share for the year were $20.36 billion, $14.57 billion and $1.62, which represented declines of 9 percent, 18 percent and 13 percent respectively.

"Our business continued to be negatively impacted by weakness in the global PC and server markets," said Chris Liddell, chief financial officer at Microsoft.

In response to the changing economic climate, Microsoft has turned to layoffs for thousands of employees, which has helped the company soften the blows to the bottom line.

"In light of that environment, it was an excellent achievement to deliver over $750 million of operational savings compared to the prior year quarter," Liddell added.

The first-ever decline in sales in Microsoft history isn't surprising given that the just past third quarter saw the first-ever decline in profits.

“While economic conditions presented challenges this year, we maintained our focus on delivering customer satisfaction and providing solutions to our customers to save money,” said Kevin Turner, chief operating officer at Microsoft. “I am very excited by the wave of product and services innovations being delivered in this next fiscal year.”

The release of Windows 7 could start a wave of sales for Microsoft as both consumers and businesses figure it's time to upgrade, especially after skipping Windows Vista.

Microsoft, however, isn't so quick to pronounce Windows 7 as the savior of the industry just yet. Microsoft senior vice president Bill Veghte said last month that the new OS might not be able to turn things around single-handedly.

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  • 7 Hide
    cekasone , July 24, 2009 10:08 PM
    the picture of steve ballmer is priceless. if anyone plays WoW, he looks like he's doing a /fear emote. haha
  • 0 Hide
    Anonymous , July 24, 2009 10:15 PM
    I think 7 will boost Windows sales by much the first year!
    There are many myself included waiting to get 7. I have bought vista myself, but don't use it (kind of a waste of my money).
    My laptop will always go XP, but perhaps a future desktop for gaming might go 7!
    As long as it's not Vista,I'm happy to buy.

    Does MS do some exchange? (like exchange your Vista disks for a Win7 disk (and pay a couple of bucks)).. That'd be cool!
    Then they would see how many actually want the switch!
  • Display all 28 comments.
  • 0 Hide
    maurath55 , July 24, 2009 10:25 PM
    ProDigit80I think 7 will boost Windows sales by much the first year!There are many myself included waiting to get 7. I have bought vista myself, but don't use it (kind of a waste of my money).My laptop will always go XP, but perhaps a future desktop for gaming might go 7!As long as it's not Vista,I'm happy to buy.Does MS do some exchange? (like exchange your Vista disks for a Win7 disk (and pay a couple of bucks)).. That'd be cool!Then they would see how many actually want the switch!


    7 is based on vista, its so close to the same vista drivers work just fine. i cant stand people who are so ignorant to this fact
  • 2 Hide
    fulle , July 24, 2009 11:11 PM
    Oh, come on, Maurath... you're the one I'm more annoyed with.

    First of all, you quoted a complete moron, so that even after we neg his post into oblivion, if people don't think what you said was stupid enough (which it was pretty stupid) I'm stuck looking at it still. Thanks for that.

    Second, your point is bullshit. Windows XP was based on the Windows NT kernel. Many pieces of the GUI were very similar as well, and lot so the drivers built for NT worked on XP. But, XP wasn't really just an evolution from XP. Windows Me was also based on Windows NT and was supposed to be the successor to 98...

    History repeated itself. Microsoft tried to make a consumer OS from a kernel they hadn't tried that on before... made something that was incredibly unpopular, but learned from the mistakes and came out with a solid product a few years later.

    While Vista is definitely no where close to as bad as Windows Me, I still think its stupid to say that since 7 and Vista share much of the same code base that they aren't quite different products. I can't stand people who are so ignorant to this fact.
  • 0 Hide
    fulle , July 24, 2009 11:19 PM
    replace the line: "But, XP wasn't really just an evolution from XP" with "XP wasn't really just an evolution from NT or Windows 2000".

    Also, on second thought, I suppose its not that annoying that you flamed ProDigit with a weak argument... since, at least you flamed him. Broken english comments with "me no like vista but me like 7" make me want to slap someone.
  • 1 Hide
    Honis , July 24, 2009 11:22 PM
    I wouldn't be surprised if sales fell partially due to such a successful Beta and RC of 7! People on XP got there hands on and probably said, I'll wait for this!
  • 2 Hide
    doomtomb , July 24, 2009 11:22 PM
    Revenue dropped to a measly $58.44 billion. I'm not worried.
  • -4 Hide
    p05esto , July 24, 2009 11:40 PM
    I have no problems with Vista 64. I've got it tuned just the way I like it, no UAC or Aero...runs like a champ for me, I don't think it's crashed since being installed. I as well think the Vista bashers are kinda clueless.

    Frankly it's the little things in Windows 7 I don't like. The Vista task bar 3D looks sharper, I like the Classic start menu better and other details. Vista is just fine for me.

    It's all just been media hype surrounding Vista (for the most part obviously)
  • 1 Hide
    7amood , July 25, 2009 12:05 AM
    picture related... XD for real...
  • 3 Hide
    midnightgun , July 25, 2009 2:03 AM
    What annoys me is their net income was still 15 billion dollars, and they gave people pink slips anyways to make the books "look good".
  • 1 Hide
    jitpublisher , July 25, 2009 1:08 PM
    Quote:
    ProDigit80 07/25/2009 12:15 PM Hide Insert quote. Report -0+
    I think 7 will boost Windows sales by much the first year!
    There are many myself included waiting to get 7. I have bought vista myself, but don't use it (kind of a waste of my money).
    My laptop will always go XP, but perhaps a future desktop for gaming might go 7!
    As long as it's not Vista,I'm happy to buy.

    Does MS do some exchange? (like exchange your Vista disks for a Win7 disk (and pay a couple of bucks)).. That'd be cool!
    Then they would see how many actually want the switch!


    Agree here, Vista Premium is in a box in the closet somewhere, and I am back to using XP. Yeah, what a waste of money it was.
  • 0 Hide
    manwell999 , July 25, 2009 2:08 PM
    1. Restrict sales by warehousing instead of distributing.
    2. Buy back discounted stocks when market has a panic.
    3. Profit.
  • -4 Hide
    bk420 , July 25, 2009 2:31 PM
    Finally. The world needs this decline BIG TIME. I don't like their products. I think we are forced to put up with junk they publish (in universities, work, and even internet cafe's.)

    I hope microsoft losses more and more money! Everytime a new version of windblows is released we are forced to buy it and upgrade because there are always incompatibility issues between office formats and hardware.



  • 0 Hide
    reininop , July 25, 2009 2:48 PM
    bk420Finally. The world needs this decline BIG TIME. I don't like their products. I think we are forced to put up with junk they publish (in universities, work, and even internet cafe's.) I hope microsoft losses more and more money! Everytime a new version of windblows is released we are forced to buy it and upgrade because there are always incompatibility issues between office formats and hardware.


    You're an idiot. They didn't 'lose' money. Their revenue declined. They still made 15+ billion dollars in PROFIT. They aren't hurting.
  • 0 Hide
    omnimodis78 , July 25, 2009 6:13 PM
    I am so sick of people saying that Windows 7 is based on Vista - get the facts straight, and stop regurgitating misinformation! Windows 7 is not based on Vista. A simple search on the facts about W7 will clarify things. Besides, when was the last time that the successor of any outgoing OS actually managed to reinvent the wheel? We haven't used a really new OS is many, many years... They're all just tweaks and fixes, for the most part. I would bet the little bit of hair that still resides on my head that those saying how they won't upgrade to W7 will be using it within a month of its release!
  • 0 Hide
    Anonymous , July 26, 2009 7:24 AM
    quote:" said Kevin Turner, chief operating officer at Microsoft. “I am very excited by ...”
    Steve Ballmer said: " I am exited."
  • 3 Hide
    randomizer , July 26, 2009 11:56 AM
    fulleWindows Me was also based on Windows NT and was supposed to be the successor to 98

    Windows Me was not based on Windows NT. It uses an inferior kernel from the Win 9x line of OSs.

    omnimodis78Windows 7 is based on Vista - get the facts straight, and stop regurgitating misinformation!

    Please stop the hypocrisy. Windows 7 is an incremental update to Vista's kernel.
  • -2 Hide
    okibrian , July 27, 2009 4:43 AM
    "In response to the changing economic climate, Microsoft has turned to layoffs for thousands of employees, which has helped the company soften the blows to the bottom line."
    It's going to be kind of hard to find people to buy your product when you keep kick thousdands of people out of jobs! Maybe the real reason Office is selling for $29 a copy in China is because it's going to be an "employee discount."
  • -3 Hide
    Anonymous , July 27, 2009 6:12 AM
    Just fired MS myself. And Norton. Poor products. Poor security. I no longer have time to chase computer bugs while my customers are waiting on documents that I'm afraid to send due to viruses/worms/rootkits. Wasted over an hour w/Norton before ordering my Mac and picking it up that day. The transition has been smooth. Microsoft, you will probably NEVER get my business again. If Apple gets too overbearing I'll try Linux. And Norton: those guys are some serious scam artists.
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