“This week, with its stock trading slightly lower than a year ago, [Microsoft], the world’s largest software company, is set to report lower profit as PC sales growth fizzles, and it struggles to convince investors that it can grab a foothold in the fast-moving mobile and tablet markets,” Bill Rigby reports for Reuters.
MacDailyNews Take: You know, a lot of people call Microsoft “the world’s largest software company.” Knowing that Apple makes software, too, we have to ask, “Based on what criteria is Microsoft is the world’s largest software company?” It certainly isn’t the market value of the company. Or revenue. Or, soon, profits. Is it in company employees? Bloated Microsoft wins that measure. Is it unit sales of Windows, Office and other software licenses or something else? Even Microsoft doesn’t claim it – their press release boilerplate states, rather laughably, “Microsoft is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.”
Rigby continues, “Most investors expect a solid quarter for the company, but are more focused on fears that Microsoft’s new Windows phone software isn’t selling well. And while approving of a recent decision to make a version of Windows for ARM chips, the market realizes that means there won’t be a Windows-based challenger to Apple Inc’s iPad for at least two years… PC sales, the surest guide to Microsoft’s overall health, rose only 3.1 percent in the last three months of last year, according to research firm Gartner.”
MacDailyNews Take: That 3.1% included Apple’s Mac sales which are outgrowing the PC market and have been doing so for 19 straight quarters.
Rigby continues, “Microsoft is expected to report profit of 68 cents per share, according to Thomson Reuters I/B/E/S, lower than the 74 cents it reported a year ago… One uncomfortable fact for Microsoft: unless it posts blowout numbers, it will have lower quarterly profit than Apple for the first time in recent memory. The last time Apple produced more profit in a year than Microsoft was 1990. Last week, Apple announced a record $6 billion quarterly profit on strong-selling iPhones and iPads over the holiday shopping season. Analysts expect Microsoft to post profit of $5.93 billion for the same quarter.”
MacDailyNews Note: “Analysts project that the software giant will show a 7 percent drop in earnings to 69 cents a share and only a 1 percent rise in revenue to $19.2 billion,” The Silicon Valley / San Jose Business Journal reports. For the quarter ended December 25, 2010, Apple posted record revenue of $26.74 billion and record net quarterly profit of $6.0 billion, or $6.43 per diluted share.
Rigby continues, “If the company does not impress Wall Street this quarter, or show it has a realistic plan for growth, questions will be asked about the leadership of Steve Ballmer, now in his 12th year as chief executive. “A string of high-level departures has raised concerns about his efforts to revitalize the company. Ballmer ‘is always on thin ice,’ said Kim Caughey Forrest, senior analyst at Fort Pitt Capital. “Microsoft is a results-driven company.'”
Full article here.
MacDailyNews Take: Microsoft board members and shareholders please maintain catatonia. Leave Balmy alone. We like his “strategy.” We like it a lot!
[Thanks to MacDailyNews Reader “Lynn W.” for the heads up.]
“Microsoft is a results-driven company.'”
He’s got to be kidding!
Ballmer’s response: It was a holiday quarter and Apple sells toys. He’ll feel that will hold him over for another three months.
Microsoft has a habit of stuffing the channel to meet expectations. I think they’ll come in at $6.1B in income just to hold on to bragging rights for one last time.
Microsoft CEO Steve Ballmer laughs at Apple iPhone on January 17, 2007
Interviewer: “Steve let me ask you about the iPhone, and the Zune, if I may. (Ballmer smiles) The Zune was getting some traction, and Steve Jobs goes to MacWorld and he pulls out this iPhone. What was your first reaction when you saw that?”
Laughter from Ballmer
Ballmer: “$500! Fully subsidized! With a plan! I said that is the most expensive phone in the world. And it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine.”
It never gets old. Enjoy your crow pie, Mr. Ballmer.
Funny thing, if you watch “Pirates of silicon Valley” and I saw some parts yesterday, I think ballmer IS there, and he acts the exactly same way, always monkey boy, now that’s funny
I think as @KenC. they will deliver the expected plus 1 dolar.
@ Jamie
Wonder what happened to that Zune traction. Maybe he meant the Zune is getting put in traction. It’s hardly even on life support now.
“…questions will be asked about the leadership of Steve Ballmer, now in his 12th year as chief executive.”
Questions will be asked? After 12 years? Goodd God!
Zune what?
“Microsoft is a results-driven company.'”
If by “results” one means how many ideas it has stolen, how many companies it has squashed, or how much money it could squeeze from its near monopoly position, yeah it’s long been “results-driven”. But that strategy has run its course. Others no longer fear Microsoft, nor do they automatically fall in line behind its strategy du jour. And they no longer accept Microsoft’s “vapor” in the face of real competitive products.
Please, please.. leave Steve Ballmer as a CEO… I really like his work
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Thanks to him we have more macs in our environment and more iphones.
All hail Ballmer! *raises glass in a toast*
Ballmer…The Man…The Monkey…The Mission.
MS stockholders: There is nothing to see here! Please disburse! There is NOTHING to see!
Largest software company by the number of lines of code …
Seriously, by the revenue from software !
Let’s not get too excited yet. I’d rather wait until the results come out. The first quarter we read that Apple would surpass MS in sales, it didn’t happen, but it happened the next quarter. Estimates for MS are so close to what Apple did, that MS, which also beats estimates usually, can climb above.
It’s inevitable that this will happen though.
I do have to disagree with MDN (again, sigh!), MS is very definitely the worlds biggest software company. 80% of its revenue and profits are from software. That’s what people mean when it’s called the biggest software company, as MDN knows quite well. IBM would be number two.
Ballmer’s for the chop. Windows Phone 2007 hasn’t been a success (so much for the mock funeral for the iphone they held). They have no tablet strategy apart from trying to flog Windows on a tablet which has never worked. Ballmer is in denial about how bad Windows is as a tablet OS check out his responses to the question Windows isn’t a very good tablet OS. (From BBC Click)
Watch him dodge the question, it’s priceless
You know what could save Microsoft’s ass? Android’s patent problems. If Android is found to be patent-infringing in court, where do all the smartphone manufacturers go for their OS?
——RM
The first one of you guys who talks to anyone on the Mister Softie Board gets his ass kicked. You dig?
What was Ballmer supposed to say when the iPhone was introduced? “Oh, we are f’ed now, what will we do in response?” Not that they could respond
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Oh they are clever. Will find a way to get that number up somehow, someway. lol
I pray that the shareholders don’t see yet alone slip on all the banana peels that are strewn on the floor over the past quarter.
May Monkey Boy remain MicroSuck CEO for as long as it takes.
Anal iZe That NAYSAYERS!
@Geo B
No, he couldn’t say that, but you’d think that they quickly develop a realistic response sooner than 2010….
@Jubei
Surely we could take up collection to buy a few Zunes so that Steve B. could keep his job a few more quarters, right.You know, we could take one for the team?
Normally, when you buy a computer, the operating system is part of the package. If you buy a mainframe, the operating system comes from the manufacturer of the hardware. That was true for PCs also. If you bought a PC, you got the operating system from the hardware vendor. In a lot of cases, the hardware vendors took the easy way out and customized Microsoft’s MS-DOS for their systems. There was H-DOS, Z-DOS, Corona-DOS, and so on. The operating system was just a component of the total product. When MS-DOS came to version 5, Microsoft began to sell it to consumers directly. DOS was no longer customized for each computer, and we all know that one size fits all doesn’t fit all. That’s where all the glitches and problems begin.
Apple isn’t the maverick for selling a vertically integrated system. Microsoft is the maverick for splitting the software away from the hardware. All manufacturers used to sell vertically integrated solutions. Apple is the only one left standing.
My point is that no one would think of Zenith or Tandy or Kaypro or Corona (later Cordata) or Ohio Scientific, or Heathkit or any other of the pioneer microcomputer manufacturers as software companies. They were hardware companies. Without an operating system, the product is useless, so that was part of the package.
Apple has never changed its policy of making the operating system a component of the hardware. Apple has not changed. Everyone else changed.
Apple is a hardware company that happens to make software. Microsoft is a sales and acquisition company that happens to make software.