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October 25, 2013 06:50 am GMT
In Microsoft’s fiscal first quarter of 2014, Windows revenue from OEM partners fell 7%. That’s a noticeable decline, given that Windows revenue from third-party hardware partners is the most ‘Microsoft’ income that the company has. The decline, however, is somewhat blunted compared to what Microsoft anticipated. Here’s what the company said in its fiscal 2013 year-end wrap up, regarding the first quarter of fiscal 2014: “Excluding the impact of the Windows Deferral, OEM revenue (~65% of total) should decline mid-teens.” To see that decline come in at 7% means that the fall in OEM revenue for the quarter was around half of what the company expected. That’s surprising. Naturally, Microsoft doesn’t make predictions that it doesn’t think that it can’t at least meet, so the “mid-teens” estimate was likely somewhat conservative. But you don’t tell investors to expect a revenue decline of 15% or 16% in one of your key revenue streams if you don’t mean it. Oddly, there are some rays of light in the PC market, a place in the technology world that has had a damningly bleak year. Following the rollout of Windows 8, and its lackluster round of hardware that shipped with it, the PC market has recorded painful, repeated quarterly declines.In the third quarter, for example, the PC market contracted around 7.6%. That was a surprisingbeat for PCs. But that 7.6% decline in different context is slightly benign. In the first quarter of 2013, the PC market contracted by 13.9%. That was a rollicking moment, as it came in the first quarter following the release of Microsoft’s new operating system, and first line of tablets running its own code. Ouch. And yet, there are some encouraging signs. Microsoft won’t disclose new Windows 8 (8.1, etc) sales numbers, but it will tell you that October was the biggest month for Windows 8 activations yet. And Surface unit volume doubled in the recent quarter. And OEM revenue fell about half as far as it was supposed to. And the larger PC market is contracting slower than before. We are not at the bottom. But now I’m starting to feel that therewill be a bottom, instead of a long inexorable decline. A 7% slip in OEM revenue for Microsoft is not clean. And it does hurt. But if it is indicator that the PC market is finally slowing its record declines, then we can view it as such.
Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/0jOPiStnBYM/
The Surprisingly Small Decline In Microsoft's OEM Revenue In Its Fiscal Q1
In Microsoft’s fiscal first quarter of 2014, Windows revenue from OEM partners fell 7%. That’s a noticeable decline, given that Windows revenue from third-party hardware partners is the most ‘Microsoft’ income that the company has. The decline, however, is somewhat blunted compared to what Microsoft anticipated. Here’s what the company said in its fiscal 2013 year-end wrap up, regarding the first quarter of fiscal 2014: “Excluding the impact of the Windows Deferral, OEM revenue (~65% of total) should decline mid-teens.” To see that decline come in at 7% means that the fall in OEM revenue for the quarter was around half of what the company expected. That’s surprising. Naturally, Microsoft doesn’t make predictions that it doesn’t think that it can’t at least meet, so the “mid-teens” estimate was likely somewhat conservative. But you don’t tell investors to expect a revenue decline of 15% or 16% in one of your key revenue streams if you don’t mean it. Oddly, there are some rays of light in the PC market, a place in the technology world that has had a damningly bleak year. Following the rollout of Windows 8, and its lackluster round of hardware that shipped with it, the PC market has recorded painful, repeated quarterly declines.In the third quarter, for example, the PC market contracted around 7.6%. That was a surprisingbeat for PCs. But that 7.6% decline in different context is slightly benign. In the first quarter of 2013, the PC market contracted by 13.9%. That was a rollicking moment, as it came in the first quarter following the release of Microsoft’s new operating system, and first line of tablets running its own code. Ouch. And yet, there are some encouraging signs. Microsoft won’t disclose new Windows 8 (8.1, etc) sales numbers, but it will tell you that October was the biggest month for Windows 8 activations yet. And Surface unit volume doubled in the recent quarter. And OEM revenue fell about half as far as it was supposed to. And the larger PC market is contracting slower than before. We are not at the bottom. But now I’m starting to feel that therewill be a bottom, instead of a long inexorable decline. A 7% slip in OEM revenue for Microsoft is not clean. And it does hurt. But if it is indicator that the PC market is finally slowing its record declines, then we can view it as such.Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/0jOPiStnBYM/
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