Microsoft: 'Pressures are broad and deep'
After reporting its first-ever quarter in which sales dropped from the year-earlier period, Microsoft had more distressing news for investors.
In an earnings call with financial analysts, Microsoft Chief Financial Officer Chris Liddell warned that things continue to look tough in the global economy, describing the conditions as the worst in the company's 30-year history.
Microsoft CFO Chris Liddell: 'We remain more cautious than most about the state of the world economy.'
(Credit: Microsoft)"We remain more cautious than most about the state of the world economy," Liddell said. "Economic pressures are broad and deep."
His comments are in contrast to statements by executives at EMC and Intel, who held out hope that the worst could be behind them.
Liddell noted that emerging markets, which had been outpacing mature markets for many quarters, actually did worse in the quarter just ended, with demand down as much as 20 percent.
On the PC side, Microsoft noted that the overall single-digit decline in unit shipments was thanks only to Netbooks, which now make up 10 percent of total PC sales. Sales of traditional non-Netbook computers were down 15 percent to 17 percent, compared with a year ago, Liddell said.
One area of strength for Microsoft was the fact that the company's business customers continued to renew long-term licensing deals.
Although Microsoft was hiring even as it laid off workers, the software maker ended the quarter with 800 fewer employees than it had when it started the quarter.
Liddell didn't give a specific forecast for the current quarter.
"We expect the overall spending environment to remain difficult," he said. The company did say it is cutting its expectations for its operating expenses, now saying it may cut up to $2.5 billion from its initial cost forecast, reflecting a further $1 billion in expense reductions. It also is cutting $200 million from its January estimates for capital expenses.
Liddell was also cautious when looking further out. He said that the company expects macroeconomic conditions to remain "challenging" through the rest of the calendar year. For "calendar year 2010, there is some potential for market conditions to improve, but it is clearly too soon to call," Liddell said.
During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina. 
You have 3 articles that basically say the same exact thing.
Slow news day?
remember you need to make stuff easy for apple fanboys = )
I find it hilarious that the boards here are packed to the rafters with Microsoft fans who troll daily, yet are absolutely quick to shout about how they're in such danger of seeing a post or two from someone who isn't a Microsoft aficionado. Preventative posting to avoid hurt feelings, perhaps?
Apple posts record earnings ever yesterday and has sold it's 1 millionth app today, during a recession, yet MS has posted its worst loss of all time and laying 5,000 previously.
I guess ballmers predictions of people not buying expensive Apple products was wrong. Maybe he should just stop talking, everything he predicts, the opposite happens.
I love it.
The iphone isn't that expensive compare to other smart phones, and the ipod is in par with others. And this two are the ones that are responsible for Apple's growth.
...compared to far larger losses by Microsoft, apparently. Even on negative trajectories, Microsoft seems to be hurting harder.
Sure, poking fun at that fact is all too easy to do, but the question remains: What is Microsoft going to do about it? They can't hide it anymore, they can't just sit around and mope at the economy (especially when its competition has weathered it far better - a peek at Red Hat's growth and even Apple's weathering of the whole thing proves that Microsoft is taking it harder than most).
For a quick and fun comparison, notice how Intel is optimistic now, but AMD is not? Which one is more confident of their future (hint: obviously not AMD). Now take that comparison and apply it to Microsoft - while Apple is confident about how things are going in spite of the economy, Microsoft is wearing sackcloth and ashes to their own earnings calls.
Says a lot about Microsoft, no?
I think that MS future is promising.
Win 7 is on its way, with good reviews for the beta (didn't try it myself). Windows mobile 6.5 is going to be out and 7 is coming in the near future (regardless if people like this OS or not). A new Zune. An ew apps store (like everyone else that are building apps stores for mobiles), the new Surface Touch (don't remember the correct name), etc.
I think that MS got a bit cocky, and they thought that they can do whatever they want. But they are showing sings that things are changing, and that they are taking the costumer into account.
And of course MS is being hurt harder than Apple. Apple's market is much smaller than MS (in the PC market), so any change in this market will hurt MS more than Apple. Another thing is that Apple is doing great due to the iphone and ipod (great devices), which their sales weren't hurt as much.
They fix the problems they have been.
Stability? Windows has been delivering this with the release of NT since 1993 - memory management, pre-emptive multi-tasking.
Scalability - Windows 2000 provided this along with robustness and the ability address massive amounts of memory.
Mainstream 64-bit - Windows XP Professional x64 and Vista have provided this giving both developers and consumers new opportunities to realize new benefits in performance and further stability.
Security - Vista zipped this one up very well - UAC, Bitlocker, ASRL, Windows Firewall with Advanced Security, Device drive signing
Windows 7 - simplified networking, improved search technologies, Direct Access, AppLocker, better management of systems within and outside the network perimeter, improved performance, mobility
Yep, Microsoft has not been solving any problems. Please upgrade from Windows 3.1 mcated, its making you look bad.
You know I find it more enjoyable to call someone have them fix my problem not scavenge around looking for a support forum post wait an hour and may or may not get an answer depending on my question usually.
A broad range of users deeply dislike Vista and the weird file formats of Office 2007.
- by MisterTechie April 28, 2009 11:53 AM PDT
- Microsoft is executing a killer strategy with a killer product, in a time when it is "kill or be killed". Check out this post and tell me if you don't agree:
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