We all acknowledged that Microsoft were taking a huge risk with its new strategy, with Windows 8 launching with some very lukewarm reviews, but it seems the risk hasn’t paid off as Microsoft’s profits have missed estimates.
This was mainly due to a huge loss in its hardware division where the company was forced to write-off $900 million worth of Surface RT tablets and accessories.
The move didn’t bode well for Microsoft on the stock market either, with the company’s shares falling some 9% in early US trading.
Wall St doesn’t seem particularly happy with any tech firm at the moment, with Google and Apple also sharing the heat — although the latter has yet to announce its financial results.
Microsoft recently slashed the prices of its Surface RT tablets worldwide to just £279, in a desperate attempt to shift some of stock, which some people estimate to be some six million devices left unsold.
The $900 million write-off is Microsoft’s worst since last year where it wrote-off $6.2 billion relating to its 2007 acquisition of aQuantive.
One thing Microsoft has also had to contend with is dwindling PC sales which continue to plague Windows 8’s chances of success, but its Windows division did report a 6% increase with revenues of $4.4 billion.
Microsoft also managed to shift over a million Xbox 360s despite the announcement that it will soon be replaced by the Xbox One — a device which set the internet ablaze with complaints thanks to its restrictive policies.
Whilst Microsoft’s performance is largely down in Q4 2013, with revenue, operating income and net income all taking a tumble compared to last quarter, it’s still not quite as bad as the loss it reported this time last year.
With the company currently undergoing a massive reorganisation we may see next quarter looking a little more sprightly.
