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Microsoft Sales Decline for First Time Ever

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5:21 PM - July 24, 2009 by Marcus Yam

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.

Source : Tom's Hardware US

Talkback
Add your comment
Upendra09 07/24/2009 11:41 PM
Show
cekasone 07/25/2009 12:08 PM
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-7+

the picture of steve ballmer is priceless. if anyone plays WoW, he looks like he's doing a /fear emote. haha

ProDigit80 07/25/2009 12:15 PM
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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!

maurath55 07/25/2009 12:25 PM
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ProDigit80 :
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!



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

fulle 07/25/2009 1:11 AM
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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.

fulle 07/25/2009 1:19 AM
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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.

Honis 07/25/2009 1:22 AM
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-1+

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!

doomtomb 07/25/2009 1:22 AM
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Revenue dropped to a measly $58.44 billion. I'm not worried.

p05esto 07/25/2009 1:40 AM
Show
7amood 07/25/2009 2:05 AM
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-1+

picture related... XD for real...

midnightgun 07/25/2009 4:03 AM
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-3+

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".

jitpublisher 07/25/2009 3:08 PM
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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.

manwell999 07/25/2009 4:08 PM
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1. Restrict sales by warehousing instead of distributing.
2. Buy back discounted stocks when market has a panic.
3. Profit.

bk420 07/25/2009 4:31 PM
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reininop 07/25/2009 4:48 PM
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bk420 :
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.



You're an idiot. They didn't 'lose' money. Their revenue declined. They still made 15+ billion dollars in PROFIT. They aren't hurting.

omnimodis78 07/25/2009 8:13 PM
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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!

Anonymous 07/26/2009 9:24 AM
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quote:" said Kevin Turner, chief operating officer at Microsoft. “I am very excited by ...”
Steve Ballmer said: " I am exited."

randomizer 07/26/2009 1:56 PM
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fulle :
Windows 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.

omnimodis78 :
Windows 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.

okibrian 07/27/2009 6:43 AM
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--2+

"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."

Anonymous 07/27/2009 8:12 AM
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--3+

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.

neiroatopelcc 07/27/2009 11:27 AM
Hide
--3+

okibrian :
"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."


don't blame the company for trying to state afloat. Any company would do that. Company first, employees next, the rest of the world last.

neiroatopelcc 07/27/2009 11:30 AM
Hide
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bk420 :
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.


What's a new windows version got to do with office formats? And by the way, old office products can for free get an addon to support new office formats and even those of sun's office. And new office products support all the old shit, even word perfect and richtext!
As for compatibility - have you tried to compare it with apple's os or linux distros? you get way less compatibility with either of those than you do with windows out of the box. on linux most can be made to run though, but so can it on windows if it doesn't automaticly.

Anonymous 07/27/2009 5:24 PM
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-1+

I think we are all missing something major here! Is it me or all all companies money grubbing backstabbers ??? Their NET ( not gross ) profit went down to 14.57 BILLION dollars and they mentioned they laid-off thousands of employees. I don't know the numbers but if they got rid of 4,000 employees making $100,000 a year then they saved 400 million dollars. If they would not have gotten rid of those employees then their NET profile would have been 14.17 Billion. That is a huge amount of money. Sounds like they threw a lot of people under the bus for absolutely no reason at all !

dextermat 07/27/2009 6:52 PM
Hide
--3+

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

Or maybe Vista is a flop and didn't run Crysis as well as it should of :P

dextermat 07/27/2009 6:52 PM
Hide
--3+

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

Or maybe Vista is a flop and didn't run Crysis as well as it should of :P

cregan89 07/27/2009 9:07 PM
Hide
-1+

Microsoft even admitted that Windows 7 was largely based on Vista so I definitely wouldn't go as far as to say that "Windows 7 is not based on Vista".

With that being said, Vista is not a bad operating system, and anybody who says that it is a bad operating system is an idiot who jumped on the Vista hate bandwagon years ago. Vista made huge advancements in stability and security in the Windows line up. And admittedly it was far from perfect. And that is where Windows 7 comes in. Windows 7 was not written from the ground up, where as Vista was pretty close to completely rewritten compared to XP. BUT, Windows 7 is also way, way more than a service pack to Vista. Many parts of 7 were completely redesigned from Vista, for example, UAC, networking, backwards compatibility (within Windows API, I'm not talking about XP mode), graphics card driver framework + DX11, and most importantly memory management was completely redesigned which is what gives Windows 7 that feeling of hugely increased responsiveness compared to Vista.

But I do agree that it is pretty gutless of Microsoft to cut thousands of jobs when they just pulled in almost $15 billion in profit just so that their "numbers" don't look as bad.

Anonymous 07/27/2009 10:01 PM
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Last time I checked ( ~ 2003) 60% of MS revenue came from investments and not software of which OS sales constituted only 20(something)%. I don't think OS sales are going to help the bottom line.

monicas 10/11/2009 6:24 PM
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-0+

People let's just go out there and buy stuff.

Monica S.
Los Angeles Computer Repair
http://www.sebecomputercare.com


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