Microsoft to Aussies: we’ll charge what you can bear – $20 Billion Profit last quarter.
Posted on July 18, 2013
Microsoft Reports Fourth-Quarter and Full-Year Results
Results reflect ongoing strength in enterprise offset by a challenging consumer PC market.
REDMOND, Wash. — July 18, 2013 — Microsoft Corp. today announced quarterly revenue of $19.90 billion for the quarter ended June 30, 2013. Operating income, net income, and diluted earnings per share for the quarter were $6.07 billion, $4.97 billion, and $0.59 per share. These financial results include a $900 million charge, or a $0.07 per share impact, related to Surface RT inventory adjustments.
The following was reported back in March but is worthwhile re-posting. – Courtesy of iT News
Australian MD criticised in IT price inquiry.
The committee reviewed 47 Microsoft and rival products and found on average Microsoft products were priced around 66 percent higher in Australia than the United States.
Marlow came under fire for what the committee claimed was “evasive behaviour”. It said the managing director was toeing the company line rather than providing information the committee needed for its investigation.
Committee deputy chair Paul Neville said the absence of a global pricing structure didn’t absolve Microsoft from acting fairly in the local market, and said Microsoft was charging what it could get away with.
Marlow said Microsoft was operating within the law but admitted the company was charging what customers were willing to pay.
“I believe we are not operating in a global economy where organisations need to have a global price. I think companies should be able to set prices lawfully across different markets.”
Committee chair, Nick Champion, suggested that meant companies could charge what the market could bear.
“Correct,” Marlow responded.
The managing director did not offer any concrete justification for why Microsoft’s prices were on average 66 percent higher than in the US, according to Neville.
Why am I not surprised
“While our fourth quarter results were impacted by the decline in the PC market, we continue to see strong demand for our enterprise and cloud offerings, resulting in a record unearned revenue balance this quarter. We also saw increasing consumer demand for services like Office 365, Outlook.com, Skype, and Xbox LIVE,” said Amy Hood, chief financial officer at Microsoft.
Microsoft’s latest set of quarterly results show that its ARM-based tablet offering, the Surface RT, has failed in the market, leading to a massive write-down.
While results for the three months ending June 30 this year were generally positive for the enterprise side of Microsoft, the company booked a US$900 million (A$981.5 million) “inventory adjustment” for Surface RT.
The Windows division however saw its operating income more than halve in the last quarter, from US$2,422 million for the same time last year to US$1,099 million.
Overall, Microsoft hauled in US$19.89 billion in the fourth quarter with earnings of 59 US cents a share, missing analyst targets of US$20.73 billion and 75 cents per share earnings.
Prediction – Windows (circa) 12 will be just a glorified version of Internet Explorer – and everything/all programs will be internet based (SaaS – Software as as service) – no ownership of software, pay as you go! Stops piracy, however also provides continuing income to the likes of MS et. al.