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back to article Microsoft feasts on Vista coupons for record quarter

Microsoft posted a 65 per cent boost in its third-quarter net income thanks in large part to revenue from major new releases and upgrade coupons that promoted them. Both profit and sales for the period that ended in March surpassed analyst estimates. Shareholders welcomed the results by driving shares up almost five per cent in …

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so basically...

Microsoft are claiming the free Vista vouchers as sales, whether they have been redeemed or not. Pc that were sold as XP machines are being credited towards the Vista sales figures.

perhaps microsoft should only use figures from retail sales of vista rather than preloaded versions. That would highlight the people who have actually *chosen* to use Vista

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Silver badge

Open Source is how important?

I feel sorry for Microsoft. The IT industry as we know it today (you know,where our paychecks come from...) would not exist if MS weren't around. Everyone likes to point out the problems with MS but then the company posts record results. My favorite are when tech people make financial assessments of the company (i.e. http://www.theregister.com/2007/04/26/microsoft_needs_a_gerstner/) It doesn't look like Microsoft's performance is plateauing, or like they are in trouble, or that they are losing market share to open source. Open Source, "Web 2.0", and all that stuff seem to be just so much smoke.

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Anonymous Coward

Not quite

>Microsoft are claiming the free Vista vouchers as sales, whether they have been redeemed or not. Pc that were sold as XP machines are being credited towards the Vista sales figures.

I agree the Vista sales have been fudged in the same sorts of ways that all software sales are fudged, but un-redeemed vouchers really don't help boost earnings by 65%.

> perhaps microsoft should only use figures from retail sales of vista rather than preloaded versions.

Why? My 3 year old laptop's video card can't run Aero, so why would I purchase a retail version of Vista? It is much cheaper for me to get an OEM. At the end of the day, OEM sale may not necesarily equal a user, but it is still profit for Microsoft. To claim that a OEM sales should not be counted is just silly. Most people who are knowledgable enough to install something else are also knowledgable enough to know they don't have to buy the Vista license if they don't intend to use it.

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How does that include vouchers?

How much revenue can they make from free upgrades? I'd suggest none as the title explains (£10 shipping fee is hardly huge)

Couple this news with that of the boost of new PC sales (on the reg a few months back - PC sales were much higher Q1 2007 than the past few years by quite a bit)

Sorry Vista haters, thing this is showing that it's actually being shipped quite a bit, and people are paying for it too.

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Having a laugh?

£10 + tax not a lot for shipping 2 dvd's in a paper case >2nd class< isn't a lot? Next you'll be saying the 3 month wait was perfectly reasonable for an "express" upgrade.

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Vista - What Vista???

I, like many others who took the express upgrade path (and i use the term express in the loosest possible term) are still waiting for the software to be sent.

I have now been waiting for nearly 12 weeks, money has been taken from my account for the software but no e mail to say it has been sent and no reply to any e mails to Moduslink!! And no updates on their website.

That will be where their extra profit is coming from - taking money and not supplying the software!!

Microsoft want to rethink when they choose partners for any of their promotions and make sure that they get someone that can actually deliver the product when they say they will!!

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smoke and mirrors

Steven Hewitt - you haven't understood. Just read the details at Microsoft's web site. Smoke and mirrors are the order of the day when US companies do their accounts.

$1.67bn of revenue was sales of XP (about 40million OEM XP home licenses?) deferred from prior quarters and counted as Vista sales in this quarter, because an upgrade voucher was offered. MS have treated these XP sales as Vista pre-orders with temporary XP license, to convert the anticipated Vista flop into a "success" that only a monopolist can create. The money from these sales was not recognised as sales when the sales occurred, but was "saved up" to make the Vista quarter look good.

One quarter of the "record earnings" were fabricated with this charade.

And as for Jesse Melton - talk about Stockholm syndrome. Microsft hijacked and smothered the industry, and for that I'm supposed to be grateful?

"Sorry Vista haters, thing this is showing that it's actually being shipped quite a bit, and people are paying for it too."

Just check software best sellers at Amazon.com. Right now: XP Home 14th; XP Pro 30th; Vista Home Upgrade 49th, handily beaten by such blockbusters as "Kids typing Instructor II" and "Quicken Willmaker plus Estate Planning". It's even less popular than Zune, which is 42nd in music players with dozens of Apple, Sandisk and Creative models ahead of it.

But don't worry, MS is still a monopoly, and will have you using Vista in the end anyway.

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Tim

Deferred revenue isn't a scam...

... it is _required_ under Generally Accepted Accounting Principles (GAAP).

Joe user bought an XP system with a coupon for a vista "upgrade," all for X dollars. MS is not allowed to book the full (wholesale) price as revenue, as they have not delivered all of the value. To wit: The Vista upgrade, included as part of the purchase.

They defer that portion of the total revenue, and book it later when when they deliver the final component of value offered in the product. The breakdown of that portion of the value is theirs to determine, but it must appear reasonable to auditors based on pre-coupon sales, the value of the upgrade, and perhaps other factors.

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..but last quarter's Vista revenue is a scam.

Of course, if you pay me up front for an aeroplane I haven't even started building, I mustn't recognise the revenue as sales until the plane has been delivered. But 40 milion XP buyers who didn't say no to a Vista voucher did not recceive no value in the prior quarter. Rather than receiving the entire value when they were able to upgrade, I suggest they only really received the difference in selling price of the Vista and XP OEM licences, especially since exercising the upgrade voids the "temporary" XP license. In other words, they received approximately zero additional value when Vista was released! This is confirmed by the continuing greater popularity of XP at amazon.com. I say scam. But Microsoft and Wall Street love a scam, and it's a monopoly anyway, so everybody's happy.

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Vista - What Vista???

After long delays and numerous e mails - payment of postage charges still no software.

I checked the status of my order this morning only to find that they have cancelled the order.

No e mail or communication in any way as to why the order was cancelled even after the order had been confirmed.

Just waiting to hear from them after the e mail I sent this morning asking why the order was cancelled and pointing out the fact that what they have done would possibly be classed as fraud or theft.

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