Tuesday, April 27, 2010

PC industry earning again after slump: Microsoft

Windows 7 is the latest stable Windows operati...Image via Wikipedia

MICROSOFT'S profit has risen 35 per cent, largely due to sales of the latest version of its Windows operating system, as corporate technology buyers begin to join consumers in demand for personal computers.

The results are further evidence that the PC industry is continuing to rebound after one of its worst slumps in history.

Initial demand for Windows 7, a version of the operating system released in October, which was much better received than predecessor Windows Vista, was mainly fuelled by consumers.

But Microsoft suggested last week that business customers were also starting to retire machines running older versions of Windows in favour of new models with Windows 7.

For its third quarter ended March 31, Microsoft said revenue from its cash cow Windows division rose 28 per cent from a year earlier to $US4.42 billion ($4.76bn).

It estimated more than 10 per cent of all PCs worldwide were running the software already, making it the fastest-selling operating system in the company's history.

Microsoft's finance chief Peter Klein said Windows 7 was a "phenomenal story both on the consumer side and now a little on the business side".

He said the company saw a "lot of deployment coming" from Windows 7 PCs among business customers.

Microsoft reported total profit for the quarter of $US4.01bn, or US45c a share, up from $US2.98bn, or US33c a share, a year earlier.

Revenue rose 5 per cent to $US14.5bn.

Microsoft's results included the deferral of $US305 million in revenue related to a program that allowed customers who bought Microsoft's Office suite of applications to upgrade free to a new version in the next few weeks.

Without that deferral, Microsoft said revenue would have been $US14.81bn, or an 8 per cent increase from a year earlier.

"What's most encouraging is they see business PCs coming back," Pacific Crest Securities analyst Brendan Barnicle said.

Still, Mr Barnicle said Microsoft's results didn't contain any dramatic signs that the company had managed to harvest growth from newer trends in technology, such as internet search or "cloud computing", in which companies such as host online applications for business customers in big data centres.

Industry watchers view both trends as potential threats to some incumbent technology companies.

Microsoft has started to invest heavily in both areas.

The company is making a big bet that it can catch up to Google by heavily marketing Bing, a new version of its internet search engine that launched last year.

Revenue in the online division, which includes Bing and its MSN website, grew to $US566m from $US507m a year earlier, but the losses from online services swelled to $US713m from $US411m.

Microsoft's results demonstrate there is still life in the traditional computer business, despite high-profile new devices such as Apple's iPad.

Intel, the dominant supplier of chips for personal computers, had its profit almost nearly quadruple recently and revenue increased 44 per cent.

Demand in the overall PC market has returned, with a 24 per cent year-over-year increase during the first quarter in global shipments of new machines, according to research firm IDC.

Microsoft expects sales to businesses to further improve as it releases a wave of products in the coming months, including Office 2010 and its SQL database software.

The company is also upbeat about prospects for a major new consumer product, code-named Project Natal.

Read more about Windows password recovery

Enhanced by Zemanta

No comments:

Post a Comment


Related Posts Plugin for WordPress, Blogger...