Oh sure, Microsoft is kind of bummed about a few things. It just posted a $1.9 billion loss ($1.2bn coming from Q406, when it started dealing with the red ring of death) and its head of Xbox,
Peter Moore, just took off (or was fired); the Zune may be a bit of a laggard, selling just 1.2m units in the course of ten months (compare to Apple's brisk iPhone sales, thought to be
between 500k -
1m or more in just a few days), and the fact that "
Vista is doing ok, but it isn't blowing the doors off," according to one Microsoft-trading stock manager. Still, Microsoft's bottom line ain't nothing to scoff at: profit is up 7.3%, with the company taking in $3.04 billion over $51.1 billion in sales in its last financial. These figures are boring to some, we're sure, but there's something kind of fun knowing that Redmond could probably afford to buy the world's beaches at $1 per grain of sand.
Read - Microsoft financials: +3bn hit points
Read - Xbox 360 posts $1.9bn operating loss [Via Joystiq]
Read - Zune sells 1.2m units, hooray Zune
posted July 20th 2007 1:26PM
woot....Welcome to the Social, ifanboys.
You act like selling 1 million Zunes is something worth bragging about. As if the Zune is giving the iPod a run for it's money. Apple sold how many iPhones in the first week? Got it. Oh, not to mention their 100,000,000 iPods sold.
Oh, shut up. Who cares? They're different companies for a reason, y'know, that being that if you don't like one, you can buy stuff from the other. Nobody cares if you think Apple is better than Microsoft and visa versa. In the long run, it's not going to affect anything other than Engadget comments, so please, for the love of all that is holy, just keep your fanboy comments to yourself.
I assume you're refering to the OP. "iFanboys" ... Get a life.
@ Palooz - So let me get this straight...the other guy needs to get a life, yet you're hanging around to defend your meaningless little reputation on Engadget? Way to go buddy. Try moving out of your parents' basement.
There's no way you could possibly be talking to me.
1. My name has three o's.
2. I don't own an iPod or a Mac.
3. I don't live in my parents' basement.
4. My parents' don't even have a basement.
But that's okay, we all make our mistakes. The original comment has fanboy written all over it. I post back with facts and get thrashed.
FACT: Apple has sold more than 100,000,000 iPods.
FACT: Apple sold about 1,000,000 iPhones in the first week.
FACT: Microsoft has sold 1% of what Apple has sold. That is not "a run for their money."
OPINION: Selling 1,200,000 Zunes in 8 months is nothing to brag about.
Now, let me get this straight... I need to move out of my parents basement, yet you're here trying to defend your precious and oh-so-underwhelming Zune? You need to get over yourself is what you need to do.
Fact : Ipod's are the most over hyped and worst performing mp3/4 players in the market. Archos products wipe the floor with them any day of the week but haven't got the "household" name, so they don't sell as well. Anyone i know that has a brand new top of the range ipod still gets envious at my 4 year old archos av420 that i bought for 1/3 of the price they are paying for the crap they have
Just as the Rockefellers could sit on a pile of money made 100 years ago by an amazing business move, MS is reaping current rewards over past endeavors. If they hadn't fooled IBM, very little of the modern efforts seem to be working very well for them in the business realm.
I will be interesting to see what becomes of MS in a few years. Just reading miniMSFT blog suggests there are some BIG problems gong on there. Yes, they make huge numbers, but the company also requires huge numbers because it dwarfs all other companies. If Walmart doesn't pull in a gazillion dollars, everyone wrings their hands wondering why they stumble so badly. MS, too. If they can't keep growing, in essence they've stagnated or have begun a decline. Furthermore, nothing suggests they have anything that is really set to be a huge seller for them. They have many potential sellers that seem to be choking on their hype. They're in Sony-ville-- make a bunch of products that don't really seem to excite anyone at the moment. This suggests a loss of focus.
They want to own every market. By following this misguided principle, they may be set for a massive recession in their business. Maybe then, after a laying off 75,000 people, they can regain some momentum.
"Furthermore, nothing suggests they have anything that is really set to be a huge seller for them."
Let me preface this with the requisite - "I'm not an apple/microsoft fanboy. I have an ipod and am typing on a windows machine." But, are you KIDDING ME?? Have you even heard about this little project Redwood has been dabbling with called the Surface computer. That thing is already marked for installation in the majority of higher-end casino establishments, and it, or a variation thereof, will be trinkling down to the consumer level in a short amount of time. Plus, it's freakin' cool (so what if the multi-touch tech was originally developed by that Stanford guy, all companies borrow/license technology). Not too mention that Vista, while perhaps not selling like gang-busters, is a huge seller, as is the Xbox 360, for all of its faults. And that doesn't even begin to step into the commercial realm. Baseless fanboy-ism methinks.
Meanwhile, they are finishing up this latest plan - http://www.microsoft.com/presspass/press/2005/jan05/01-10RedmondExpansionPR.mspx
Building 9 new buildings, and bought or leased 9 or so more. Hired more than 6k new employees last year alone, 2 million plus square feet added just in Redmond.
Be sure to check out the full sized image of the map on this link - http://www.microsoft.com/presspass/features/2006/feb06/02-09CampusExpand.mspx
The place is larger than most college campuses and some cities. Looks like they are doing really bad, able to spend over a billion on Xbox360s, make this many new buildings (in a VERY expensive area of the country for real estate I might add) and hire all those people.
Yes, the very definition of stagnation.
Company size does not equal healthy growth. If it did, they could acquire $500 billion worth of new companies and they'd be the all set to go. The issue is management. If they're too big to execute properly, who cares how big their campus is?
No, but it's a positive sign, and far from an indicator of trouble on the horizon.
er, I suspect there are more grains of sand on the beaches of the world than even Microsoft could afford. Australia alone has an estimated 7500 billion billion grains:
http://www.astro.utu.fi/~cflynn/sand.html
Still, I would be happy to venture out with a bucket, if Microsoft is in the mood...
or 7.5 sextillion... however, I suspect Ryan was attempting to amuse with hyperbole.
7,500,000,000,000,000,000,000
Is it not possible for people to keep their comments shorter than the article itself?
I'd say that those figures will definitely be up by a decent margin this time next year, as long as there's no more big announcements (360 warranty) again. The 360 is going to be profitable within the next quarter or two, especially with Halo 3 on the horizon, amongst many others. That game alone is worth about $100M to MS, and it'll be responsible for moving a ton of systems too.
Zune may not stand a chance though, but I think the gaming and Windows divisions are definitely going to strengthen over the next year.
As far as their XBOX division is concerned, how will they be profitable by the end of the year? they were headed out of the red until they had to shell out over a billion for extending the 360 warranty due to all the RROD. Not even Halo3's '100mil' can dig them out of their billion dollar hole.
EDIT:
I meant by the end of next year.
Simple - that $1BN was written off in this past fiscal year.
With Halo 3, GTA IV, Madden 08 and a bunch of other big titles, accessory sales and XBL subscriptions, as well as manufacturing costs due to fall with the introduction of the new 65nm processor, the division is on path to be profitable this fiscal year.
I dont know, they're spending tens of millions to get exclusives, they have to make up a lot of Live time for all the missed time during repairs, class action lawsuits,etc. if anything, i'm thinking they may just break even or still take a loss.
i'm not trying to be negative. i want to get a 360. i just dont want to take the leap and then find out MS will just cut their losses and come out with a new system in just 4 years like they did with the original xbox.
and just in case anyone was thinking it, i DONT have a ps3. i have a wii and it's just not as satisfying as i think an xbox360 would be.
Did MS ever release sales targets for the Zune ? 1 million units is obviously low but I seem to recall they set expectations low too (2 million in first year maybe? anyone have a link ?)
The 360 loss is clearly temporary and related to the setting up of that reserve to cover the extended warranty. Although costly in all other aspects this was the right move and has probably ensured they will continue to command customer loyalty through to the xbox 720.
The 4th Qtr 07 and 1st Qtr 08 sales are going to be especially good for the 360 considering the recent confirmation of scheduled releases in this period, and of course the "halo effect".
Vista is selling well, not Win95 well, but well - and I suspect better than many thought. Its not as if DX10 parts are easy to afford right now and a fully functionining (i.e. not Dell) Vista based PC doesn't come cheap.
Overall, I was expecting worse and would be buying stock right now in anticipation of '08 performance :)
"Its not as if DX10 parts are easy to afford right now and a fully functionining (i.e. not Dell) Vista based PC doesn't come cheap."
I have a Dell XPS 410 and it works better than any computer I have ever owned. Dell stopped bloatware practices and has improved significantly over the past year or so.
So please, spare us the "dells suck" bandwagon. Its still more tired than anything having to do with the iPhone.
It really is stunning how naive and ignorant the comments are on here. I mean that in the way that so few seem to understand anything about financial markets or business in general.
Yes Microsoft made a lot of money. So what. It's about company performance. They improved 7.3%. Not bad. But not so great compared to other companies. And a whole lot less than the overall stock index.
The Zune is a complete and utter failure. Deal with it. It has been outsold 100 to 1. Expect the plug to be pulled eventually. Interesting anecdote: I was at a party recently and mentioned the Zune amongst about 15 people. Not a single one of them had heard of it. And I know for a fact that several of them dislike Apple and their products, owning Sandisk or Creative players.
The xbox is also a failure, though less of one. The original xbox lost over 5 billion for Microsoft. The 360 losses are now in the billions too. They did manage to get some mind and market share though, unlike the Zune. Unfortunately, the 360 is now getting punked by Nintendo.
At this point I find it highly unlikely that the xbox will ever be profitable. They would have to first not lose money in a quarter then make 6-7 BILLION in profit, just to break even. Considering the console video game market... it would take about 15 years of profitability for that to happen.
As for someone that mentioned the surface computer. BFD. For it to be material for Microsoft, it would have to sell about 5 billion dollars worth. Doubt that will happen any time soon.
Is Microsoft going to disappear? Of course not. However, they are quickly becoming (if they haven't already become) like IBM or Coca-Cola. A ho-hum giant corporation with incremental growth.
They have cash cows in the OS and Office. Pretty much everything else from Microsoft simply hasn't done much.
All people are talking about here is Microsofts consumer products as it relates to 14year olds. There's more to Microsoft than the ZUNE, XBOX360 and Vista.
They do a lot of business at the corporate and government level with their enterprise level software. But no one here seems to realize that.
I'm not defending Microsoft, I honestly think that for a company that large and that well funded we should be seeing a shit load of products that blow our mind. Instead we keep getting the same pathetic attempts to catch up while the industry keeps moving forward.
I was called out to look at a neigbours PC, a Dell with Vista. It took about 10 minutes to start up, and would take 30 seconds to a minute to open a window, thats with all the fancy graphics turned off, in short, completely unusable. Turned out it was a basic model, with only 512MB ram, plus the sound and modem drivers were not working because they weren't vista compatible. its clear Dell don't even bother to test the machines before sending it out the door. I wouldn't recommend them to anyone.
>Vista is selling well
Depends on how you define selling. If it wasn't preinstalled on PCs and laptops and just a box people could choose to buy or not, I'm pretty sure they wouldn't 'sell' any of it...
And get this, businesses and OEMs can downgrade Vista-licenses to XP (probably because of market demand)
http://download.microsoft.com/download/5/f/4/5f4c83d3-833e-4f11-8cbd-699b0c164182/royaltyoemreferencesheet.pdf
What would Redmond care, as long as it counts as a 'Vista-sale' it's probably good by them. But let's face it, it's nothing to be proud of, especially not with all those resources and six years of 'development'
"And get this, businesses and OEMs can downgrade Vista-licenses to XP (probably because of market demand)"
Yea, it would have nothing to do with the millions of people at all assorted companies which have not had time to test all their home grown/custom apps against Vista yet, and a need to stick with what they know works for them right now, rather than opening a potential can of worms due to app compat which their business model revolves around.
Few businesses use a small, tried and true selection of software, in fact many make their own, or have some other small outfit do it. Those apps are not always written well or correctly, and as such, typically have huge porting issues.
yes, totally true, but it will also be used as an argument to get the Vista-license (in a short while you probably aren't able to get a XP-license anymore), because you can still downgrade it to the OS you actually want.
My point is, are the sales figures of Vista reflecting the enthusiasm of the market? If you ask me, not one bit.
Uhm...
40 MILLION units of Vista sold in the first two months. That's almost twice the total number of USERS of the second most popular retail OS.
Let's keep this in perspective - Microsoft's 'failures' are bigger successes than most companies successes.
And as for most of them being sold bundled with systems - I call BS on that. Vista Home versions didn't OEM until mid-Jan... most of first months' sales are upgrades - the desktops and laptops didn't catch up until late March when Microsoft ended their 'free upgrade' for people who bought XP systems after Oct 2006.
Is everyone who bought Vista or got it with their computer using it? Nope. But so what? Micrsoft still gets paid for each copy - so either way, it's a success for Microsoft - which is the point here: that Vista is by any sane measure a success in terms of sales, not a failure.
As for resistance to adoption, this is normal practice in the business world: you never run out and upgrade your entire fleet of computer to the latest and greatest... you'd be nuts to do that. You spend 6 months to a year testing it with your enterprise apps to make sure it's safe and stable, that your IT infrastructure can support it and to determine what, if any, benefits will come of it.
Only then do you roll it out.
That means that most businesses are still in the 'wait and see' mode. That's one reason a lot of businesses roll back laptops to XP (and, BTW, why Microsoft allows rollback...).
So sorry - this isn't a case of a failure - it's a case of 'not being as big a runaway success as we hoped it would be' - ie: unrealistic expectations.
As for the Zune - Microsoft knew up front that it would take time to break into this market. They said right at the beginning that they knew this wouldn't blow away the iPod. So again, it's not relevent that they didn't sell as many as Apple - it's only relevent that they sold as many as they expected to sell.
>Vista Home versions didn't OEM until mid-Jan... most of first months' sales are upgrades
...to OEM-versions, thank you very much.
>Vista is by any sane measure a success in terms of sales, not a failure.
By any sane measure for shareholders you mean. For them it's a success. For an average end user it's a total failure.
Why should anyone, businesses included, upgrade to Vista again? To get what exactly?
>So sorry - this isn't a case of a failure
Imho, as a product it is.
Is this somehow supposed to make me NOT enjoy my 360? Because I sure enjoy it...
No. How did you reach that conclusion? Stop jumping at the "Engadget is biased" platform, because it's ridiculous.
In my experience, MS makes very nice server software like Server 2003,SQL, Sharepoint, Project, Great Plains Accounting, and lets not forget about Office. I'd venture we have spent close to a half million dollars or more in licensing in less than 2 years and we are a small company of 70ish. I'd say MS makes more from back end software than consumer OS's.
...or you could've gotten yourself one linux system-administrator... For 250K a year you can get quite a good one too! ^_^
And don't forget about the $250k you'll have to spend in training/finding employees to use said linux software ^_~
Gates has less & less to do with MS. Anyone see the correlation?
I don't see a bright & shiny future for MS with an hyper spastic oaf like Steve Balmer running the place. The man is an idiot.
Sell your stocks now.
Oh, and the Surface will not go anywhere, unless it is done by another, more technically daring & savvy company. IF it is done by MS, it will just be a big, expensive coffee table that displays the BSOD.
"the surface computer won't go anywhere"
As David Pogue's article on the surface computer points out, Microsoft is ALREADY set to install them into "1,200 T-mobile cellphone stores; Starwood Hotels; Harrah’s casino; and IGT video-game stores." For a system that the buy-in is around 10 grand, that seems to be a good deal of product movement for a product that won't go anywhere. But good point though.
So, you look here for financial advice, dummy?
How 'bout this - first, get yourself a labotomy, then find a hooker (I think it has been a while for you)
then, punch yourself in the mouth.
No charge for that, its free.
You're welcome.
Neat. All three of those logos have "x" in them.
>still $3bn richer
Making money doesn't necessarily say you're on the right path. Ask a drug pusher.
Markie, while looking at all your posts for this story, I've realized that you are a complete idiot!
>I've realized that you are a complete idiot!
Hahaha, well, ever since I bought a Vista license I indeed feel that way! ;-)
Now I see how I'm wrong!
Xbox 360 shipments dropped to 700,000 units, down from 1.8 million during the same period last year. Total division revenues were down 10 percent off decreased 360 sales.
Sorry, everyone. This is clearly success.
Ok, lemme get this straight. Engadget, and paloooz are comparing a music player's sales....to a phone? Can anyone tell me how much iPods were sold when it first came out? Oh, about 200?
From one iPod-owner to another, let me say this:
Zune selling 1 million units (or shipping or whatever you want to call it) is in fact VERY important. Why? Well, because one must assume that the many people in the world that DON'T own an mp3 players are actually more likely to buy an iPod than anything else.... unless there's something else grabbing a bit of their attention.
Is Zune an "iPod Killer"? Probably not. But it can definitely steal some of the attention away from iPod and take a little of would-be iPod market share with it.
(Most importantly, though, I think that IF the ZUne succeeds, then it could be just the thing that helps people realize that there are other good mp3 players in the market - even if they don't buy a Zune or iPod. Just my thoughts.)
" pulling the plug on the zune soon"?
They sold over a million and have 11% of the hdd sales... what a retard to think this is a failure its beating everyone else . They sold like 2 ipods when it came out and didnt pick up for years and generations. If you wouldve said that about apple when releasing the ipod you would feel like a jackass now... you prolly are though... owning all apple shit!
The Zune is brown. I like! Nice.
:( poor little microsoft