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back to article Microsoft blames poor Windows sales on PC slump

Microsoft has released its quarterly results, and reports that Windows revenues are down 6 per cent when compared with the previous quarter. For the last three months, Microsoft not only saw its Windows division revenues fall 6 per cent, but its business division grew just three per cent despite strong sales of Lync, Exchange, …

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Anonymous Coward

Just look out for next year

Their tablets at 1x to 4x the price of competing iOS and Android offerings will fix that Windows sales slump. Just you watch!

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Nah

The tablets will be heavily subbed to keep the prices down (hence why MS are demanding all ARM mobos be Win8 only) and pressure placed on OEMs to not ship/raise Android prices.

In short, they will leverage their monopoly on PCs to gain control of tablets and kill off any competition.

Unlike nature, MS adores a vacuum.

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@TheBigYin

Except that won't work for tablets in the way it did for PCs, because their killer App is and always has been office, and nobody really gives a damn about office for tablets, which are largely media consumption devices and facetwatter clients.

I agree that they will try though, I just think that this time they'll fail.

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Anonymous Coward

Err...

Don't forget that Windows tablets are going to be a different beast to existing tablets, they will feature the full Windows OS, not a slightly upped version of the Win Phone OS. I'd jump at the chance of a tablet with a proper OS, I'd really like a Fedora tablet, I won't use Android because it's too limiting. For this reason I'd seriously consider a Win8 tablet when I can't seriously consider the current Mac or Android offerings, even if it costs more.

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@AC

In that case I'd wait about 6 months after the Win8 tablets ship, by then UEFI should have been cracked and you can then install a proper OS on to it.

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@TheBigYin

I'm not convinced that locking will do anything for their Windows sales income. Once you've paid for the tablet/phone device (from which Microsoft has taken their slice of profit), what difference would it make to their income if you then install Linux/Android or whatever? Only if Microsoft see locking your device to use only Windows as the way to generate further income from you (anti-virus subscription, Windows Apps, etc) does this make commercial sense.

Apple, RIM and the Android-OEMs have such large market shares that Microsoft will have to compete on price and features, and I just don't see locking the device to use only Windows will be seen by consumers as a "must have" feature!

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Its not the end of the world

They already make money from each Android sale, once they release Office for iOS and Android they'll be coining it in regardless of how well win8 tablets sell.

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Devil

Going to be?

Hmmm... as I sit here typing from Windows 8 Developer Preview on a Samsung Series 7 Slate.

Oddly, since I bought this thing, 5 other people (all iPad owners) have rushed out and bought one as well. Windows Tablets are PCs for people who actually like to accomplish things.

I have a dock on my desk hooked up to a 24" screen, a keyboard and mouse and my office network. When I get to work, I stick it in the cradle and use it as a computer to program video codecs on. It's more than fast enough to handle the hard core programming tasks like compiling a bazillion lines of code 30 times a day.

When I leave the office, I pack the tablet in a netbook case (as I'm still trying to find a fair price on a proper cover for it) and when I get to the train, I sit for half an hour watching TV shows on iTunes, playing Android games, reading news, read books on Kindle, or whatever that I used to do on my iPads.

When I get home, I plug an XBox 360 controller into it an play DC universe or I connect it using Intel Wireless Display to my projector and watch movies. I use an iPad cradle for holding the tablet at home since it was easier to buy than an extra Samsung dock. And besides, I don't need wired network or HDMI at the house. I have a bluetooth keyboard and mouse in case I want to do something productive.

So, I have no idea what this "are going to be" thing is... the "is going to be" thing I'm waiting for is fitting all this into a phone.

I can't wait to get an Ivy Bridge tablet for Christmas next year... better graphics and 8 hours of battery! Intel GMA 2000 (6 core yuck) with 4 hours of battery is a little too little.

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@jubtastic1

"They already make money from each Android sale, once they release Office for iOS and Android they'll be coining it in regardless of how well win8 tablets sell."

Er, what...? Since when did MS make Android? And since when was Android for sale, not free under an open source licence?

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Vic
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> Er, what...?

He's right.

> Since when did MS make Android?

They don't.

But they do have a significant number of lawyers who have been claiming patent coverage of Android. A number of tablet manufacturers have apparently caved in[1], and are now paying Microsoft for every Android tablet they sell.

Vic.

[1] There is another theory that says these deals are actually *very* advantageous to the tablet makers, and are costly to MS, but provide them with grounds to spread FUD. AFAIK, there's insufficient evidence to know if this theory holds water, but it's definitely in the "wouldn't surprise me" category.

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Anonymous Coward

Interesting

So all the members of your "I want to have Bill Gates Baby" club are running Win 8.

If you went into the the real world you would find most (90%+) of the world use their tablets to browse the web, media player and some actually read.

Tasks that the current breed of tablets handle very well and a bloated, expensive Windows product will offer no advantage to switch to - especially since by the time it hits the market Apple (and to some extend Android) will own the market - much like Windows in the past.

It is nice your company allows you use a business device for home use (or plug in a personnel device into the work network). I would be fired for such a trick. But then I work for real company that worries about the security.

MS knows they completely missed the boat on the tablets - now their fear is the server market will move away from Intel and right now that means running Linux and ZERO MS products.

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Unhappy

@AC at 14:41

I have run Win8 DevPrev. It is probably one of the most vile things I have ever had to suffer. GnomeShell annoyed me but I could get things done, Unity was just terrible (I hear it's better now, not tried it of late) but Win8...of dear god. So many clicks to do *anything*.

Real work does not get done on a Metro app and I do not like having to go through that bull-crap swooshy change thing just to get a neutered desktop.

Seriously, it's dreadful.

And at some point I am going to have to write software for the bloody thing.

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"I'd jump at the chance of a tablet with a proper OS"

yes, and then add a proper keyboard and a proper monitor to it, and you got yourself one great device.

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FAIL

"The full Windows OS"?

So which version of Photoshop, Call of Duty, and all those other Killa Appz® will this "full Windows OS" run ... on an ARM processor?

http://www.extremetech.com/computing/96507-the-end-of-wintel-windows-8-arm-will-not-run-x86-software

Face it, the forthcoming "Windows" tablet will just be "Phone 8", and the nearest thing it'll have to a Killa Appz® is a game of magic squares pretending to be the GUI.

As for Fedora or any other "desktop" GNU/Linux distro on a tablet ... certainly, if you can find a suitable touch-oriented UI. The current crop of KDE4/Gnome3/Unity UIs seem promising in that respect, but there's still far too much typing required IMO - for a tablet, anyway. Until such time as they've been more refined for tablet use, the existing phone/tablet UIs are far more suitable - even the pig-ugly Metro. I'd run Gentoo on a tablet in a flash (ho, ho) if I thought the UI experience would be usable on that medium, but it isn't IMO, so until it is I guess I'll stick with Android

Although, now that I think about it, MythTV, XBMC or any of the usual "10 foot interface" UIs might actually be OK on a tablet.

Canonical recently made an announcement about better support for tablets and Smart TVs, so they're probably the ones to watch for a good GNU/Linux-based tablet solution in the near future - no doubt based on Unity.

But "Windows" 8? I've heard a lot of comments from even die-hard Windows fanbois who think it'll sink like a brick. Apart from the fact that it's hideous and looks like a kindergarten toy, it ain't really Windows and won't run Windows software. That'll kill it stone dead. If Microsoft's lucky it might pick up the 0.66% it currently "enjoys" in the Phone 7 market.

The only thing that might save "Phone 8" is if Microsoft "pulls a netbook", but the market conditions are completely different to that last "phenomenon". ARM ain't an x86 architecture that Microsoft can just waltz onto with a resurrected relic, and the OS it needs to usurp isn't something unknown and unfamiliar to the masses. We have Android now. IMO that's game over.

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Anonymous Coward

More likely unemployment hurt sales

With double digit unemployment in the U.S. and elsewhere I suspect this hurt PC sales the most.

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Anonymous Coward

What this article fails to mention of course is that the earnings release, was, once again, entitled:

Microsoft Reports Record Revenue of $20.9 Billion in Second Quarter

Note the 'record revenue' bit.......

MS continues to go from strength to strength. Everyone used to say that if Windows took a tumble the company would be in trouble. This is evidently not the case.

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I think you mean

"MS legal department continues to go from strength to strength. "

They are gouging money from Android over untested patent threats. You may recall that B&N describes them as "trivial", has found lots of prior art and is fighting back. Good.

Maybe if B&N win MS will be forced into operating within a free market and facing some competition. If they do, it's use (the consumer) who will benefit.

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@AC

A premature conclusion since you can see how much money is coming in, yet you have no idea how much money is going out again.

A big revenue by itself looks impressive, sure. Then take a look at the size of the company and its assets, then then ask yourself how much such an environment would cost. And all of a sudden those high numbers aren't so impressive after all.

Focus your attention on net income instead, then you might be less optimistic.

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“Competing Form Factors”

"Customers were, as he put it, faced with 'competing form factors' - a polite way of saying that tablets are selling like hotcakes and Redmond still hasn’t a good-enough OS for that market."

Out of curiosity, have *any* tablets other than iPads been selling in significant numbers?

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Anonymous Coward

@Turtle - Looking at how desperately Apple tries to stop them

I would answer yes.

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Anonymous Coward

Google would say no

Looking at how apple tries to stop what?

It certainly isn't sales.

Googles own figures aren't that great

http://www.zdnet.com/blog/mobile-news/latest-android-figures-paint-dismal-tablet-picture/6296

People just aren't buying android tablets.

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FAIL

@Nergatron two points

1. It's hard to get good numbers when your product is banned in several markets.

2. The most popular Android tablets for the moment (Samsung Galaxy Tab) are running Gingerbread making that Znet article completely pointless.

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@Gerhard

Two points

1). If your product is banned, then there are no sales. Zero is a fairly precise number

2).. These are googles own figures so they are not pointless

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FAIL

really

It doesn't matter whose figures they are because they are being used to show something they can't possibly show. You can't extrapolate tablet uptake based on ICS and Honeycomb activations if most of the Tablets being sold are using Gingerbread instead.

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Anonymous Coward

And...

The Gingerbread figures are stated in these 'pointless' numbers

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60% of 200 million activated devices is still over 100 million devices. Admittedly this will also include phones, but I'm not sure anyone can say that they aren't selling.

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@Nergatron

I can't tell if you are trolling or just fail at reading comprehension but just in case:

"The figures just released show that of all Android devices activated to date, only 3.3% of them run Android 3.x, aka Honeycomb. Honeycomb only runs on tablets, so the numbers paint an accurate picture of just how few Android tablets have been activated. If we use Andy Rubin’s latest tweet claiming 200 million devices have been activated to date, that 3.3% running Honeycomb only represents 6.6 million Android tablets."

He adding up the numbers for ICS and Honeycomb and assuming those are the total amount of tablets when, in fact, the hottest selling tablet still runs on Gingerbread and his interpretation of the numbers will count those as cellphones rather than tablets.

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Linux

"People just aren't buying android tablets"

Well, "only" 40.3% of them:

"The free market, in all its terrible beauty, is Apple’s most friendly enemy. After 18 months of being effectively the only tablet game in town (as a function of sales, anyway) the Cupertino giant’s deathgrip on the slate market is starting to crack. According to IDC, Android’s share of sales in the fourth quarter of 2011 will reach 40.3 percent of all tablet sales. That’s up considerably since the third quarter, which has been variously projected as 20-30%."

http://androidcommunity.com/low-prices-boost-androids-tablet-market-share-to-40-20111221/

You were saying?

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T J
Go

Tick.....Tock.......

In some ways I'm going to miss Microsoft. They were colourful.

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Anonymous Coward

I most definitely won't, because that "colourful" was from being covered in blood from all the backstabbing. Personally, I think MS has caused more harm to the computing world than anything else out there, and they are still at it (take the ISO standards gaming and the more recent standards disaster at the UK's Cabinet Office as an example).

Showing that blatant law abuse makes you rich isn't a good example in my book, and neither is buying up geniuses so they won't innovate for the competition. There's precious little innovation coming from Redmond other than new ways to bypass monopoly laws, so the quicker they go the better.

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Anonymous Coward

Collapse in popularity of netbooks blamed ?

After what they did to them ? Wasn't Microsoft who imposed those draconian hardware specs restrictions and that idiotic Windows starter edition ? And they are now surprised that customers are buying Android tablets and iPads like crazy ?

Sorry, Microsoft, but by killing the netbook you gave a massive opportunity to tablets, all running non-Windows operating system. Now catch Android if you can!

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Anonymous Coward

"that idiotic Windows starter edition"

"That idiotic Windows starter edition"? Meaning Windows XP? Well, as far as I can tell, the vast majority of PC users (both at home and at work) and indeed IT departments would actually be quite happy with Windows XP. It's only because MS can strongarm the volume PC builders into installing what MS want installed that there was a Vista disaster, from which Windows 7 is finally recovering. But XP does most things for most people in a relatively satisfactory way.

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FAIL

No, Windows 7 Starter Edition

The intentionally crippled version for netbooks.

This is what it lacks WRT "standard" Win7:

- Aero Glass, meaning you can only use the “Windows Basic” or other opaque themes. It also means you do not get Taskbar Previews or Aero Peek.

- Personalization features for changing desktop backgrounds, window colors, or sound schemes.

- The ability to switch between users without having to log off.

- Multi-monitor support.

- DVD playback.

- Windows 7 starter Media Center for watching recorded TV or other media.

- Remote Media Streaming for streaming your music, videos, and recorded TV from your home computer.

- Domain support for business customers.

- XP Mode for those that want the ability to run older Windows XP programs on Windows 7 starter.

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No, it means Windows 7 Starter Edition

The Jar Jar Binks of code.

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Anonymous Coward

@ T J

More like 'ker cheching' methinks. $20B in 3 months. Tasty.

And I am still chuckling at the suggestion that MS needs to 'catch Android'. Android comes under the 'utter fail' catagory in the tablet space. Win8 will decimate it.

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Is that what you meant to say

..bearing in mind that "decimate" means to (cause to) reduce BY (not TO) 10 per cent?

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Why is android an utter fail ?

I dont get it.

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Anonymous Coward

You would think there would eventually be a time when those wanted a PC finally got one. Wanting a PC isn't like wanting an iphone. PC owners don't buy a new one every year.

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Anonymous Coward

Yep.

Even the computer illiterate have realised that you don't need a powerful machine to dick about on facebook and watch the odd flash video.

This is probably part of ms's problem, they try and sell a new os or encourage you to buy a new machine with their new os, but all people ask is 'can i still dick about on facebook and watch videos? Oh. I can do that already'.

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Joke

"I'm a PC and Windows 7 was my idea"

I told Microsoft that I'd like to be able to dick about on Facebook and watch videos, and so they released this new feature in Windows that allows you access just by clicking the Internet button......... oh.

[cut to flashcard]

Windows 7 - It lets you do everything you did on XP, but we may support it past 2014!

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Vic
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> PC owners don't buy a new one every year.

I've met quite a few people who decide that they need a new PC because their old one is running slowly.

I always try to explain to them that a bit of a tune-up (i.e. a reinstall) would make it like new again, but this never seems to work; I suspect many people just want an excuse for some new shiny.

So these days, I offer to take the old one away. And I acquire another quick box running a RHEL clone...

Vic.

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"And I acquire another quick box "

Ditto but with OpenSuse on it

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Anonymous Coward

I call bullshit

Show me the reduction in actual sales of Windows against actual sales of PCs themselves and I'll believe it. Or are they afraid it will show a divergence away from actual sales of Windows greater than the sales of actual PCs showing a desertion to FOSS or Apple?

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Anonymous Coward

Bullshit indeed.

Where's the *analysis* of these numbers? Or at least a link to the press release?

E.g. where is Windows revenue coming from these days? Boxed retail sales? Corporate licence agreements? Big PC OEM deals (aka Windows tax)? C'mon El Reg.

Here's the press release link anyway:

http://www.microsoft.com/investor/EarningsAndFinancials/Earnings/PressReleaseAndWebcast/FY12/Q2/default.aspx

But obviously it doesn't answer the important questions like where does Windows revenue come from now in comparison with two years ago, and where they expect it to be two years from now. And how do they plan to deliver that in the new world order where Wintel are increasingly irrelevant and ARM is out there in volume but currently lacks a single unified platform standard (other than MS's attempts to make mass-market ARM hardware Windows only by dodgy dealings at the BIOS level)?

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WTF?

I don't get it....

Microsoft dives and Intel soars. I find that a bit of a head scratcher....

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Silver badge

Intel picked up some nasty sores in one of Microsoft's dives?

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Apple

Macs run on Intel iron too.

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Anonymous Coward

@ PhillipN

Get with the plan old boy....

dec•i•mate [des-uh-meyt]

verb (used with object), -mat•ed, -mat•ing.

1.

to destroy a great number or proportion of: The population was decimated by a plague.

And Kevin. It is fail because they have sold about 6 Android tablets. People want iPads, not the cheaply made, yet overpriced copy cat rubbish that represents the android tablet 'ecosystem'. It is a horrible operating system when it is on a phone and it just gets worse on a tablet.

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Trollface

OMG, you're right!

This is the most awful phone and tablet OS I've ever seen. The way it reacts immediately, and the various launchers you can get if you don't like the stock look and feel. The unified marketplace across so many different devices, the cheap price, the battery life that gets longer instead of shorter with each release, the voice recognition and notifications area that Apple thought was so bad they had to copy it, the ability to do all of this without touching a rooting utility...

You're right. I have seen the light.

I shall replace my Arc S and Tab 7 with iProducts immediately!

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Get with The Plan Old Boy (2)

Actually decimate orginally means to reduce by 10 percent, I believe actually it came from the Romans, where if a legion fought a battle in a cowardly way it would be decimated as a punishment (1 in every 10 soldiers was executed). History lesson over.

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