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Microsoft Says Chip Supply Challenges Hurt Windows

Mark yet another victim of chip shortages: Microsoft's Windows business. The company said in an earnings call last night that Windows OEM results were lower than it had expected because of chip availability for its hardware partners.

"In Windows, the overall PC market was smaller than we expected primarily due to the timing of chip supply to our OEM partners, which constrained an otherwise healthy PC ecosystem and negatively impacted both OEM Pro and non-Pro revenue growth," said Amy Hood, Microsoft's chief financial officer. "Windows OEM Pro revenue declined 2 percent, roughly in line with the commercial PC market. OEM non-Pro revenue declined 11 percent, below the market with continued pressure in the entry-level category."

The lack of OEM Windows sales also meant that consumer sales of Microsoft Office took a hit. Still, Microsoft's "More Personal Computing" business had $13 billion in revenue, which is a 7 percent increase over last quarter boosted by its Surface computers, like the Surface Pro 6 and Surface Laptop 2

In fact, Surface revenue was up 39 percent to $1.86 billion. Its gaming revenue was also up 8 percent, mostly due to Xbox and game services like Xbox Live and Game Pass. 

Microsoft also turned up strong results in Azure (up 76 percent, continuing to be a larger and larger focus for the company) and LinkedIn, which is up 29 percent. Overall, the company had revenue of $32.5 billion and net income of $8.4 billion.

  • beaulieu80
    I think we need new type of CPU, we been on that same technology for way too long.
    Reply
  • lun471k
    Tensor cores, Quantum processing units, Raytracing dedicated cores... There's a ton of new processing units.
    Reply
  • redgarl
    What about AMD... you don't want to optimize Windows for their platform?
    Reply
  • Karadjgne
    Quick! Pass the Buck! Let's blame someone else for Windows failures. HP, Dell, Lenovo etc buy liscences in bulk, not per unit, so pc sales would have to be dramatically low all around for MS not to see a profit. With Ryzen systems selling like hot-cakes and new Intel cpu's mobile as popular as they are, I find that hard to believe.
    Reply
  • Gurg
    Chip shortage=fake news. Plentiful supply of CPUs at local Microcenter with 10+ each of 9900k, 9700k and 9600k. 16gb of 3600 RAM at just $139. 500gb 970 evo for $130 on Amazon (half the price I paid for my first 240gb m.2 four years ago) . And there is even starting to be limited number of overpriced 2080tis at local Microcenter.

    What hasn't happened is a meaningful justification for PC owners to upgrade their systems.
    Reply
  • Bama65299
    actually there is a shortage. I work in IT. We are waiting on our shipment of new pcs. no I8s in stock. gone through 2 vendors. having to downgrade to I7s for the time being
    Reply
  • alan_rave
    Ok))What about Linux? Amd + Linux powerful and cheap
    Reply
  • Karadjgne
    @bama65299,

    I'll bet they have plenty of i9's in stock. At premium prices still. With you wanting bulk items, at budget/bulk prices, I'll bet you are being told 'out of stock' because there's no excess stock for that
    Reply
  • Tanyac
    21729587 said:
    Chip shortage=fake news. Plentiful supply of CPUs at local Microcenter with 10+ each of 9900k, 9700k and 9600k. 16gb of 3600 RAM at just $139. 500gb 970 evo for $130 on Amazon (half the price I paid for my first 240gb m.2 four years ago) . And there is even starting to be limited number of overpriced 2080tis at local Microcenter.

    You're not thinking globally.

    Graphics cards, RAM, CPUs, Samsung SSDs and several other components are all in short supply here. As a result, prices of CPUs have hiked 20%-30%, as have Samsung SSDs. Graphics cards still have not dropped in prices here from their insane levels at the crypto mining peak. The new RTX series cards are priced 20% higher than the highest point the GTX cards were at. $2000 for an RTX 2080 is not uncommon.

    To put that into perspective for you, that's around $1440 USD for a RTX 2080.

    And RAM is still almost double (Or triple in some cases), to what it was in October 2016, again with no evidence the prices will ever come down.

    21729587 said:
    What hasn't happened is a meaningful justification for PC owners to upgrade their systems.

    That is true.
    Reply
  • Gurg
    @Tanyac
    Not sure where you live but if a 2080 costs $1440 USD$ there, my guess is that someone-most likely your gov is ripping you off. $709 for cheapest MC 2080 in Fairfax VA.
    Reply