Microsoft Limps In Behind Apple With Reduced Earnings

| January 22, 2009 | 0 Comments

A day after the excellent quarterly results from Apple it was Microsoft’s turn. Although revenues were up 2% to $16.63 billion, net income was down 11% to $4.17 billion, which demonstrates a significant fall in profitability. This drives the need to reduce costs and has led to confirmation that 5000 jobs will be cut at Microsoft in the next 18 months

Why is Microsoft struggling in a market where Apple is thriving?

Product Lifecycles

I think a lot of this down to timing and their respective product lifecycles. Apple have the iPod, which is a mature product and cash cow, but also have the iPhone still at the growth stage.
Microsoft, on the other hand, have Windows 7 still at the introduction stage. The beta version is available for download right now but there is uncertainty as whether we will see a full release this year as Microsoft’s statement is that:

The specific release date will be determined once the company meets its quality bar for release

Don’t expect Steve Ballmer to be sipping champagne at the “quality bar” this year. Based on the product life cycle what you can expect is Apple to have a great 2009, with strong revenues from the iPhone, while Microsoft users like myself stick with Windows XP, eschew the poor performance of Vista and wait for Windows 7 with its promises of improved performance and an easier user interface with touch technology, speech recognition and the new “superbar”. {Maybe Microsoft execs are too focused on bars right now}

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