The reason why the graph turned down is poor reception of Windows 8.1. Experts say that despite the many other fields where Microsoft has been doing well, such as – Surface Pro and Office 365 and Xbox – the company’s shares fell by 3% in the quarter ending December 2014. It took a while for Microsoft to prepare the statement and understand that Windows 8.1 was not being accepted very well in the market. Experts did not explicitly say Windows 8.1. The sources simply used Windows operating system but the reports lead us to believe the culprit or the main reason behind fall of graph is Windows 8.1
Microsoft reported a net income of USD 5.86 billion for the quarter ending December 2014, which was USD 6.56 billion in the quarter ending December 2013. Thus the difference comes to more than a billion in one year. During this one year, Microsoft saw a positive strength in sales of Surface, and especially Office 365 that is the favorite of many projects from different walks of life and people.
From college students to huge businesses, everyone employs Office 365 for their projects and going by it, the quarter should have seen a surge in profits but instead, Microsoft reported a profit margin much less than they expected and now they are blaming Windows operating system for the blunder.
Note that the past few months had seen a surge in Microsoft’s shares, owing to the different new projects in its basket. Even with all those advantages, Microsoft (MSFT) has seen its share price falling by 3% at USD 45.63 on Monday night. This was following the event where Microsoft reported its net profit.
The reason for fall in rate of shares is also being attributed to the lesser profits than projected average and to the strong US dollar. The latter being strong, fluctuations in currency affects the net profit, especially because almost 70% of Microsoft’s revenue comes from outside the US.
In what comes as a surprise, Microsoft earned USD 2.28 billion in sales of Windows phone because it did not have any market value until an year ago. The Windows Devices section grew by 30% to USD 2.44 billion. The Windows Devices section includes Microsoft Surface and Microsoft Surface Pro. This indicates that the tablets were received well in the market.
The only point saddening the statisticians is a decline of up to 25% in Windows operating system in OEM section.
- Tags: Finance