The Windows division of Microsoft has witnessed a drop of 6% in revenues due to tough competition from smartphones and tablet computers. The poor supply of components from flood-affected factories in Thailand has also played its part in this loss.
The revenues from Windows fell to US$ 4.7bn in the last quarter ending 31 December down from US$ 5bn compared to the same period in 2010. The anticipated release of Windows 8 and its Metro interface by the end of this year has also slowed down the momentum at the company's flagship division, pushing profits at the unit down to 11% (US$ 2.8bn).
Microsoft has sold over 525 million licenses of Windows 7 since its official release in October 2009 and 175 million licenses in the Sept-Dec quarter. Despite this sort of performance, CEO of Microsoft Corporation Steve Ballmer is quite optimistic. "Coming out of the Consumer Electronics Show, we're seeing very positive reviews for our new phones and PCs, and a strong response to our new Metro style design that will unify consumer experiences across our phones, PCs, tablets, and television in 2012," said Ballmer.
Apple seems to be forcing the whole industry to rethink its business strategy. It was quite evident in the recently concluded CES 2012, which saw most of the PC makers launching super slim ultrabooks that could compete with Apple MacBook Air laptops. The whole industry seems to be banking on this new product segment to regain the market share. Microsoft too is looking forward to ultrabook sales to push backup license sales for Windows 7 in the last two quarters before the official launch of Windows 8.