Hot from the $7.6 billion burn of Nokia’s write-down, Microsoft has posted its worst ever quarterly figures in history. For a company, which is used to posting healthy figures, to publish operating losses amounting to just $2.1 billion is just demoralizing.
Overall, the net losses amounted to $3.2 billion, which are its largest ever. However, when you take out the $7.6 billion loss, the profit actually stands at an impressive $6.4 billion from $22.2 billion revenue.
Nokia’s loss will go down as one of the major Microsoft screw-ups of all time. With no hope of recuperating any losses, the company decided to take a one-time hit and write it down. Furthermore, it announced massive layoffs and cut 7,800 jobs in the division.
Nokia’s $7.6 billion loss will go down as one of the biggest corporate screw-ups of all time
What followed it was calling for a radical strategy, which will see Microsoft release up to six smartphones a year and look for more partners.
On the brighter side, thanks to a 117 percent increase in sales, Surface division revenues grew to $888 million. Office 365 subscriber increased to 15 million (up 3 million) while the Xbox division experienced a 27 percent sales increase to 1.4 million units. Azure and Microsoft Dynamics both saw remarkable gains. Finally, Bing’s market share has increased to an impressive 20.3 percent, with profits expected in the coming fiscal year.
But if you thought that the bad news ended with the Nokia write-down, you’d be wrong. Crucially for Microsoft, revenue from Windows OEMs slid by 22 percent, which was attributed to support the company cut for Windows XP. You can also expect some of it to fall in anticipation for the upcoming Windows 10.
Microsoft could release up to six smartphones a year and look for more hardware partners
On the smartphone part too, you’ll be hard-pressed not to blame Microsoft for the losses, despite ever-increasing competition from Android and iPhone. For one, the company hasn’t released a flagship smartphone for a year (June 2014, Lumia 930) so buyers in this range don’t even have a choice. Support has been patchy with a few updates in between. And then there are the apps.
Hopefully, these issues will be solved with the upcoming Windows 10 Mobile update, which should hit most existing phones (a significant plus point). With every day, opportunities are growing narrower though.