News Microsoft reports first drop in revenue since 1986

http://www.bit-tech.net/news/hardware/2009/04/24/microsoft-reports-drop-in-revenue/1

Describes economic climate as the toughest in the company's history, and puts some of the losses down to the popularity of netbooks.

 

Wow.

 

LOL! I could GIVE them the 87¢ they lost!

 

Cry me a river. Poor poor microsoft. Mind you thinking about it, i bought more ms products end of last year than i have ever done in my entire life which include, 2 laptops with Vista and full Office Ultimate donwload from their website and a load of 360 games.

Maybe I should cut down. They still make billions and feel the need to layoff 800 people? That doesnt seem right considering their turnover.

 

You wouldn't see it in there stock price, they are up $1.99 or 10.52% for today but they are down almost $10 from 52 weeks ago

 

Netbooks are bad for the industry, when will the companies stop making them? They are only harming themselves by selling such low margin hardware. Frackin stupid. Cellphone manufacturers have higher profit margins. That's why so many cell phones cost more then a damn netbook lol. Low cost laptops are not yet feasable yet they keep pushing towards it killing themselves to have it because its a fad.

 

well once the process has started no one will just stop in hope the others will follow him

 

Don't you know that's what price fixing is for! When they all get together into a cartel and agree to certain business practices I am sure this netbook thing wont last. We will see a transition to touch net-tablets that are way more expensive but essentially cost the same to make as a netbook+touchscreen.

 

I guess I didn't, no

 

Well, mostly because cellphone manufacturers have HUGE profit margins. Motorola for example earns ~150% of manufacturing price on their higher models and that's just their profit - those phones sell for about 300% of manufacturing price, sometimes more. (those numbers came from Motorola sales guy I know for years - he's high on the corporate ladder so I'd say that they're quite correct)

You don't seem to understand the basics of the market: low profit + high sales = high profit, much higher than high profit + low sales. That's why nVidia earns far more on cheap GTX 250 than on GTX280 and they earn most of their money on cheap, integrated solutions. And that's why Intel, despite making the world's crappiest pseudo-GPUs, earns more on them than nVidia and AMD combined.

On the topic - I'm happy every time Microsoft is hurt in any way. Not because I'm some kind of negative-fanboy, but I strongly disagree with their market practices and my biggest wish is for them to have some real competition. Thankfully, it seems that their golden years are over, with Linux slowly making it to "general public" and more and more ignorants jumping on the Apple cattle-truck.

 

As n3mo has said low profit + high sales = high profit.

I guess being from the states you have never heard of primark, their profit margins must be razor thin but they move so much stock they are making a complete killing in the market.

At the minute people are not going to want to spend £500 on a new PC, so they might spend £200 on a nice stylish netbook. A sale with very little profit is better than no sale at all. In most business's even making very little profit (or breaking even) is not a problem, the key is cash flow.

Netbooks may be doing MS some damage,but they have probably kept asus, acer and samsung from a very different looking set of figures when they do their accounts at the end of each month.