Feeds

Gadgets boost software-centric Microsoft quarter

Kinect all you want. PCs and servers rule

Website security in corporate America

Gadgets gave Microsoft a boost during the Christmas shopping season, but Redmond remains heavily dependent on the sale of PC and server software.

On Thursday, Microsoft reported an 86 per cent jump in income for the unit that's home to the Xbox, Kinect, and Windows Phone 7, and the unit's revenue grew 55 per cent.

Microsoft pointed to that 55 per cent figure as one of the factors driving what it called "record" revenue and earnings per-share numbers for the whole company.

Chief financial officer Bill Klein said in a statement that the world's largest software company is "enthusiastic" about the consumer response to its holiday lineup of products, a line up that included the launch of Kinect. He said the company exceeded expectations by selling eight million units of the controller-free XBox addition t Xbox in 60 days.

Thanks to Kinect sales, Microsoft expects revenue for the unit will grow 50 per cent in the third quarter and 40 per cent for the fiscal year. There was no mention of sales expectations for phones running Windows Phone 7.

All those per centages are very impressive, but the reality is that E&D is a relatively small consideration for Microsoft. Operating income for the entertainment and devices unit was $679m on revenue of $3.6bn for Kinect, Xbox, and Windows Phone 7.

It was the business division, home to Office and the business applications, that was the company's top performer during the three months ending December 31, 2010. Operating income increased 34 per cent to $3.9bn, while revenue climbed 24 per cent to $6bn.

The server and tools unit - which handles SQL Server and Windows Server - had a solid quarter. Operating income increased 21 per cent to $1.7bn, with revenue growing 10 per cent to $4.3bn.

During the quarter, S&T's president Bob Muglia announced he's leaving the company. The departure is due to a disagreement with Ballmer over the so-called cloud. Ballmer believes Muglia has failed to sell enough Azure, Microsoft's Amazon-EC2-wannabe. Muglia's departure was not raised during Microsoft's earnings call with Wall Street analysts.</p

Meanwhile, the online unit - home to Bing - wobbled. In the period when Microsoft finally completed its integration with Yahoo! on search and ads, the group reported a loss of $543m compared to a $463m loss the previous year, despite an increase in revenue of 19 per cent to $691m.

Chief financial officer Peter Klein said there had been some "market-place disruption", but he expects the "benefits of integration to increase". Yahoo!-earned dollars will continue to dominate the revenue stream.

Operating income for the Windows and Windows Live unit dropped 39 per cent, while revenue fell 29 per cent to $3.3bn and $5bn. This partly due to the fact that Windows 7 launched in the fall of 2009. There was a spike in sales at launch, and at the same time, Microsoft came into a decent chunk of deferred cash from sales of the OS prior to launch. Microsoft claimed a total of 300 million Windows-7 licenses sold, with Windows 7 running on 20 per cent of internet-connected PCs.

Microsoft reported company-wide revenue of $19.9bn and earnings per share of $0.77. That was an increase of five and four per cent respectively, with the numbers adjusted for $1.7bn in deferred revenue from Windows 7. Without the Windows 7 adjustment, revenue and EPS grew 15 and 28 per cent. Income was flat landing at $6.6bn. ®

Reducing the cost and complexity of web vulnerability management

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.