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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."

30 of 181 comments (clear)

  1. The reason for MS's performance by Anonymous Coward · · Score: 2, Funny

    They let the drivers of sales run in ring 0 which may perform better but exposes to kernel to crashes if the drivers are not thoroughly debugged.

  2. From the desk of captain obvious ... by nospmiS+remoH · · Score: 5, Funny

    In other news, the oil industry attributed increases in gas sales to an increase in automobile sales.

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    !hoD
  3. Meanwhile.. by BlackCobra43 · · Score: 4, Interesting

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

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    1. Re:Meanwhile.. by wwwojtek · · Score: 2, Informative

      this is not "insightful" but actually quite silly - that a company makes billions tells me nothing about the direction of its stock price changes. The price should be high but it may be declining or increasing depending on changes in expectations of profits

    2. Re:Meanwhile.. by coflow · · Score: 2, Informative

      This really just shows that MS is no longer considered a "growth" company. The software they sell is mature and other than their groups that are currently losing money, there's not enough room to grow to support a P/E ratio of 100 or whatever it was 6 or 7 years ago. And even the divisions that are in "growth" categories look like small peanuts compared to the sheer size of their OS and office revenue.

      Once MS started paying a dividend, it was clear they themselves had come to grips with the fact that they were no longer a ocmpany that can expect near triple digit growth every year.

  4. stock price.... by joelanders · · Score: 3, Informative
    1. Re:stock price.... by ProfaneBaby · · Score: 4, Informative

      Stock price was inflated in the past few days on expectations of the earnings report. You'll notice that on Monday, the price closed around 25.6. Here at 10AMPST on Friday, the price is still around 25.74, which means it's still up from the beginning of the week.

      Wall Street can be a cruel mistress. Just because you make money doesn't mean your stock price goes up. You have to make enough money. It's about meeting and exceeding expectations, not just posting a profit.

      --
      Video Phone Blogs send video messages straight to the web.
  5. not even close! by intmainvoid · · Score: 2, Interesting
    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?

    1. Re:not even close! by Golias · · Score: 2, Interesting

      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.

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      Information wants to be anthropomorphized.

  6. Compared to North Carolina by pastpolls · · Score: 4, Funny

    $39b for MS, as comprared to only $19b in gross collections for the NC Dept of Revenue for 2003-2004. I hope my state does not end up on the MS radar, it could get outsourced.

    1. Re:Compared to North Carolina by pastpolls · · Score: 2, Funny

      Well, I have not thought about it.

      China is communist, so I would not want to get outsourced to them because they would limit my internet access and my ability to play Battlefield 2 (just being honest).

      India is better that China, but the odds are I would end up in a one room shack that may or may not have running water, while my house gets bought by the few rich. There is not really a middle class in India, so I would assume I would go down rather than up. There are a lot of cows in NC, so there would be limit as to where I could move.

      I guess my choice would have to be Mexico. My housing complex could be turned into a resort (I am 5 minutes from the ocean). What I have in savings could support me for years. I don't buy bottled water now, but I guess I could start. Mexico it is then.

  7. Re:Millions of Linux users around the world by Leroy_Brown242 · · Score: 4, Funny

    Yeah, in other news . . The summer is increasing the demand for water! Winter increases lightbulb usage! and Increased car usage ramps up need for better roads!

  8. MS Business Plan by Innova · · Score: 5, Funny
    1. Design operating system with poor security.
    2. People throw away old computers with malware.
    3. Sell more licenses to operating system.
    4. Profit!!!
    1. Re:MS Business Plan by varmittang · · Score: 2

      Better list:
      1. Design operating system with poor security.
      2. Lock all PC makers into shipping Windows.
      3. People throw away computers with malware and buy another one that still runs Windows.
      4. Profit!!!

      5. Rince and Repeat

      Just imagine if Apple did open up OSX to the PC side. How quickly this plan would put them into debt, but its the #2 that keeps them going.

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  9. Re:Thats why by eln · · Score: 3, Informative

    You buy your PCs retail?

    If you're smart enough to run Linux, you ought to be smart enough to build your own machine, or at least get your local computer shop to build one for you. Most Mom and Pop computer retailers sell systems they build themselves without an OS installed, and their prices are usually cheaper than the big box retailers. Support your local computer shop!

  10. And just look how little tax they pay by Anonymous Coward · · Score: 2, Funny

    Who needs hospitals and edumacation anyway.

  11. coincidence? by kwoff · · Score: 3, Insightful

    Something else that might boost MS profits. Free advertisement as three MS-related stories were posted to slashdot within 4 hours.

  12. Argh... by CarlinWithers · · Score: 2, Funny
    Every time my inner geeks feels pleased with the idea that MS is starting to release it's control of the computer industry...

    I am then crushed by an article about MS doing really well.

    I sincerely hope that MS is in fact loosing it's dominance. Not because I hate Microsoft, but because the continued dominance of MS means yet more time we'll spend without significant innovation through competition.

  13. Outsourcing by vlad_petric · · Score: 3, Interesting

    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.

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    The Raven

  14. Percentage Shhmercentage by ShaniaTwain · · Score: 4, Informative

    Uhh.. Apple Revenue rose 75% to $3.52 billion from $2.01 billion, while MS rose 8% to $39.79 billion. That 8% increase alone is more that Apple's total Revenue, its all relative.

    One thing I'm sure we can agree on though: if they keep increasing at this rate it won't be long until they both have infinite income!

    1. Re:Percentage Shhmercentage by Kiryat+Malachi · · Score: 5, Informative

      An 8% increase yielding 39.79 billion implies that the revenue was 36.84 billion, meaning that 8% is 2.94 billion, meaning that the 8% increase is *not*, in fact, greater than Apple's total revenue of 3.52 billion.

      Brought to you by the Association For Numerical Fact Checks, a division of Mathematical Bitch Slaps Inc.

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  15. This just in... by blakespot · · Score: 5, Funny
    A team of famed mathematicians have make the breakthrough discovery that the integer 2, when added to another integer of the same value (2), results in a sum total of the integer 4. Early speculation that the resultant integer would be 5 or 3 has been shattered. Stay tuned for further details on this revelation.


    blakespot

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    -- Heisenberg may have slept here.
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  16. Re:Thats why by AKAImBatman · · Score: 2, Informative

    Support your local computer shop!

    I was pretty happy with parts I got at a computer small computer shop in California. All the components were of high quality, and I could reach over the desk and strangle someone if it didn't work. Unfortunately, such shops don't seem to exist here in Chicago. There's big places like MicroCenter, but I don't really trust them. I received suggestions for NewEgg.com, but they didn't carry the parts I wanted. In the end, I ended up getting parts from MWave.com. They had everything I needed, good prices, and the service was fast. I can't speak to complaints (since I didn't have any), but they may be worth checking out. :-)

  17. Re:Mods on crack again! by j-tull · · Score: 2, Insightful

    I couldn't agree more!

    The /. crew is really taking the humor out of this board. Why be funny when, at best, it'll have no effect on your karma? At worst, humorless mods will kick your arse down to karma hell!

    (\me prepares to sink into the abyss yet again)

  18. Re:Wow, so they're up by Mistlefoot · · Score: 3, Insightful

    When people are throwing away computers to 'fix spyware' and then buying a new computer - and a new version of Windows XP - almost by force - then yes, profits will be up.

    This shouldn't be the way.

    The old version of xp should be more than enough for the new Hardware but Microsoft OEM policies almost prevent this.

    This should be remedied by law. This is abuse of their almost monopoly.

  19. Re:Millions of Linux users around the world by Alex+P+Keaton+in+da · · Score: 3, Insightful

    This may make me the master of the obvious, but... As there is more bus. on the web, there will be more servers. As a computer becomes more of a requirement for daily life, there will be more of them, and thus more software. As the "greatest generation" dies off, and is replaced by new babies, the percent of people using computers will go up, and this, there will be more computers. As the so called "un-developed" world becomes developed, more computers will be sold... and so on and so on...
    And another point....
    GM in the 70s?
    Sometimes I think we are too much geek and not enough business in our thinking. Mod this however you wish, but I see a parallel with GM. I have a 1978 Caddy Coupe Deville that I never drive, except the occasional weekend. Why does that matter? 1978 was the best year ever for GM. They had the biggest market share in their history, and the biggest profits. And they made crappy cars. In the 80s, people wanted better quality, sure, and that is something that would take a company like GM a long time to change- but the little things customers wanted- cupholders are a prime example- GM just wouldn't do. GMs thinking was that they will buy our cars, and they will like them, and we will make them how we please. Well, the Japanese put cupholders in their cars, which people wanted. (I know quality was also a huge issue, but that is beside this point), and lo and behold- people were happy. Microsoft pushes things on consumers and the consumers accept them, just like GM of old. The point- after 1978- GM declined quickly as alternatives blossomed, heck, now their bonds are rated in the junk range. When will microsofts 1978 happen, if ever? Who knows- but don't think that companies with huge market share are invincible.

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    And All I Ask is a Tall Ship And a Star to Steer Her By
  20. Re:Millions of Linux users around the world by mOoZik · · Score: 3, Insightful

    Except millions of computers users DON'T want Linux! They don't want to fumble with a difficult OS that's reserved [mainly] for the computer literate. Microsoft gives these people what they want. Why should they go out of their way to get a TuxBox? Your analogy would hold true if MS was actually putting out that PEOPLE IN GENERAL (read: not the average Slashdot reader) abhorred. As MS keeps adding new features to Windows (mostly stuff centered around the computer as a multimedia tool), Linux tries to catch-up with the basics, such as gaming, the lack of support for many applications and hardware, and so on and so forth. If anything, Linux is the OS that thinks people will adopt it and choose over a more superior (from the POV of a consumer) OS. This is the reason why it is relegated to servers, which are customized/operated/etc. by geeks.

  21. Genius and the bull market by jfengel · · Score: 2, Informative

    In the tech market, P/E is not an entirely appropriate measure. What you're really hoping for is future earnings, and tech requires a high start-up cost but returns recurring profits. (Which is why companies so jealously guard their IP, to bring up another Slashdot flamewar.)

    The trick to getting rich on the Street is to see technologies that have a high P/E (or, more often, negative or infinite P/E because they have no earnings or losses) but will "win" eventually. A nose for good technology and a strong stomach for loss are required.

    That said, it doesn't apply to Microsoft, whose earnings can be roughly tracked; you know that they're never to expand by a factor of 1,000 again. That's why their P/E is a comparatively reasonable 25, and their numbers go more like a blue-chip than real high-tech.

    It also doesn't apply to stocks that have already been bid up by speculators who don't really know the value of what they're buying, which was pretty much all of them during the dot-com boom.

    There's a hell of a lot more going on than this (like when you buy a share of MSFT you're also buying $3.48 in cash). I'll cease to bore you with any more details; usually this is as far as I go and beyond that I just play my instincts. Additional numbers can make more fine-grained analysis but they tend to get into the "damned lies and statistics" category.

    So for myself I count those rough numbers, my instinct for a products that don't suck, and the rising tide that lifts all ships. I've done pretty well, but never confuse genius for a bull market.

    One last thing: there is a difference between earnings and dividends. Dividends end up in your pocket; earnings are invested in the company. But it's your money either way, so you don't lose much by not getting dividends. When a dividend is issued, the share price usually goes down to compensate. If you want your money in cash, you just sell your stock and get your cash from the next guy. But it's not a problem that tech companies don't issue dividends; you can think of it as automatically reinvesting your dividends in R&D for new products.

  22. Re:Millions of Linux users around the world by Alex+P+Keaton+in+da · · Score: 3, Insightful

    You are 100% correct- I was thinking more along the lines of Apple being the Japanese, or a company that hasn't even been started being the Japanese. (Who in the 60's would have thought a motorcycle maker named Honda would ever have the domination they have in the auto world.) To extend the analogy maybe further than it should be- maybe companies like ferarri or MG would be the Linux- companies that in the 70s made vehicles that were alternatives for enthusiasts those who knew how to repair them, but not for grocery getters.
    And to take it one step further- if cars ran perfectly forever, there would be no mechanics. If computers ran perfectly, well, a lot of us would be looking in the help wanteds.
    I guess my point is that it is never easy to see how a company with a near Monopoly or huge market share can ever lose it w/out gov't intervention- but it can happen quickly.... (Pennsy RR, A&P in the late 1800s etc.) Hindsight is always 20/20... which reminds me- I once dated an optometrist- during sex, she would move around a lot and say "is it better like this, or better like this...."

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    And All I Ask is a Tall Ship And a Star to Steer Her By
  23. Re:Millions of Linux users around the world by ZephyrXero · · Score: 2, Interesting

    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.

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    "A truly wise man realizes he knows nothing."