Computer Demand Boosts MS Profits

elzurawka wrote to mention a BBC article discussing Microsoft's boost in profits as a result of an upswing in PC demand. From the article: "The company announced record revenue of $39.79bn for the fiscal year ending on 30 June, an 8% increase over the $36.84 billion reported last year. The main drivers of sales for Microsoft's Windows, Office and Server software products - PC makers and Asian component manufacturers - have reported healthy demand for PCs."

Comments

Meanwhile..

[BlackCobra43]

Microsoft stock falls 2.5% due to its "lackluster revenue outlooks" http://today.reuters.com/investing/MarketReportArt icle.aspx?type=usMktRpt

I'm not important enough...

[spammeister]

I suppose that the fact that I help as many people possible to not "buy" MS products has no effect on their sales. I guess I'm not trying hard enough.

not even close!

[intmainvoid]

an 8% increase

8 percent is nice and all, but when Apple's just announced a 75% increase in revenue does it even rate a mention?

Re:not even close!

[Golias]

Well, a layman might still find those numbers extremely newsworthy, as it seems to indicate that Apple is growing at nine times the rate of Microsoft.

But ignoring the statistical anomolies of comparing percentages instead of straight numbers, it doesn't make sense to compare the two companies.

Microsoft makes an OS, but most of their money comes from being a software company. Yes, Windows is on almost every PC in the world (usually at an OEM price of less than $40 a pop), but MS-Office, which costs a lot more and brings in much better margins, is on almost every PC and almost every Mac. Plus there's the money they make on IIS Servers, Exchange Servers, etc.

When compared to other software companies, Microsoft remains a giant. When it comes to wide-distribution, consumer-level software, they are leaps and bounds ahead of what little competition is left.

Apple makes an OS, but most of their money comes from being a computer company. Yes, they get their $129 a year from the hard-core OS X nerds like me, but a lot of users will just buy every other generation of OS X. The do have a couple of software products, but they are mostly there for the sake of pimping computer sales.

Macs don't sell in quite as high of quantities as Dell or HP, but they do outsell a lot of the smaller players, and make more money than just about any PC maker, due to their high margins. Also, they are realizing a hell of a lot of their revenue now from selling iPods, iSight cameras, and other computer-related gizmos.

So, it's silly to compare Apple's revenue to Microsoft, but at least slightly interesting to compare them to Hewlett Packard, Gateway, Dell, etc. When viewed in that light, Apple is clearly not dominating the market (because nobody is... Dell holds a lead for now, but a year from now, who knows. Some plucky company like eMachines could come along and take it all away from them), but Apple is extremely doing well when lined up against these other companies.

The big thing that Apple has going for it is that they are just about the only ones left who are selling a computer with an OS that sets it apart from the competition. Even if it's an OS which only a small fraction of the public wants to use, they totally own that fraction. This results in Apple exectives sleeping a lot better at night than most PC makers, who fret over their position in a cut-throat, razor-thin market.

Revenue Growth Will Turn Negative Soon

[Anonymous Coward]

Revenue growth is on its way right down. That is why the stock is down and has been falling for the past five years.

That is also why you see people fleeing to Google.

That is also why you won't be seeing very many, competent, people wanting to go work for MS. No propsect of stock growth, no reason to work at the company.

It will be fun when the revenue growth turns negative. Given the 11 billion or so shares issued, look at how little that 50 billion in cash was actually worth just to keep the stock proped up over this last year.

It is sell,sell,sell time for MS execs with stock still to unload - look at the insider sales reports to see just how much faith the current exec team has in MS's future growth.

Wrapping your mind around how many shares have been issued over the years by MS will help you wrap your mind around just how little cash they are making per share compared to other investments. And why people keep expecting them to hand out billions in cash to buy their way into new markets as the OS and office suite markets come under assault from open source.

Outsourcing

[vlad_petric]

M$ is one of the big companies that hasn't done major layoffs in the States. In fact, they were hiring when very few others were. You can't really accuse them of outsourcing. Sure, there's tons of reasons to hate 'em, but this one ain't it.

Re:Millions of Linux users around the world

[Anonymous Coward]

How does the first post get modded redundant?

Re:Millions of Linux users around the world

[ZephyrXero]

Wrong yet again...these people don't want Windows or Linux or even Mac. They simply want a computer that they can use to do their daily activities and work on. Depending on what you do with the computer, Linux can be just as easy if not more so than Windows, and vica-versa. If we can just get more software companies supporting Linux, more people will want it. People don't buy Windows for Windows' sake, they buy it for the software that runs on Windows.