Look, I try – I really do – to maintain this little hobby blog’s focus on digital media and music, but if we’re looking at technology then we’ve got to address this point:
Microsoft is dying.
It seems to offer no innovation. Its operating systems aren’t sufficiently user-centric. About the only great product it sells – the Xbox – is so heavily subsidised the company loses money on the range.
Look at the corporate results. Microsoft’s sales fell another 17 per cent in the just gone quarter as profits slid an astonishing 29 per cent. And the management – rather than self-disclosing their own inability, point to a weakness in global PC and server markets as cause.
Isn’t it truly the case that it’s a weakness in demand for Microsoft’s own offerings to global PC and server markets . Compare and contrast the company’s fortunes with those of Apple in the same period.
Apple’s third quarter financial results constituted the best non-Christmas quarter for revenue and earnings in Apple’s entire corporate history.
Read that again, “entire corporate history”.
Revenue, margins and Mac sales climbed, with iPhone sales reaching 5.2 million – up 626 per cent. Gross revenue reached $8.34 billion for profit of $1.23 billion.
Gross margin was 36.3 percent, up from 34.8 percent in the year-ago quarter.
Apple sold 2.6 million Macs, representing a four per cent unit increase over the year-ago quarter. 1.75 million notebooks sold during the quarter, up 13 per cent from the 1.553 million it sold in the same period last year. Desktop sales fell from 943,000 to 849,000, year-on-year. iTunes sold its 8 billionth song in the second week of July, Apple executives said.
Over at Microsoft we see a different story. Sales fell 17% to $13.1 billion in the company’s fourth quarter ended June 30, far short of analysts’ forecasts of $14.4 billion. That’s the second consecutive decline.
The software giant said its fourth-quarter net income fell 29% to $3.1 billion.
And if we quickly add it up. Microsoft holds c.80 per cent of the computer OS market and offers a horde of ancillary products, and plays in a host of different to Apple areas.
But Apple, with its c.5 per cent share, returned profits of $1.23 billion.
How does a dominant company manage to become so bad at making money?
Shareholders may be curious.
I think Microsoft is dying.