Larry Magid: Microsoft’s Dismal Fourth Quarter

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The Microsoft Surface tablet computer. (CNET)

The Microsoft Surface tablet computer. (CNET)

LarryMagid01-228 Larry Magid
Larry Magid is a technology journalist and an Internet safe...
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SAN FRANCISCO (KCBS) — Microsoft released a dismal fourth-quarter earnings report Thursday, which missed estimates partly due to poor PC sales.

The reality is that PC sales are on the decline. If you look at Gartner’s technology research, every quarter it just keeps going down. Every company that wants to succeed in the PC business has to branch out successfully into other things like tablets and phones.

Microsoft still has a good franchise for Windows, which still makes money and is not hemorrhaging (Microsoft Office is making money too), but it’s not getting the revenue that they once got as they had expected.

Unfortunately their cell phone and tablet business is not doing as well as they’d hoped either.

They’ve had to drastically discount the Microsoft-Surface RT. When I got mine I thought it’s not a particularly good laptop or tablet.

Apple on the other hand has a completely different strategy; they’ve got their iPad tablets, which are great. They’ve got the iPhone that’s doing well and they’ve got their Macs that are still doing well. They’re not even trying to integrate the iPad and the Mac. It’s a separate animal.

Meanwhile Google is doing pretty well with Android. Microsoft just isn’t making it. The few people that use the Windows phone love it, but the numbers of installations are just dismal.

One bright spot for them is in the gaming world and that’s with the Xbox. They should really try to monetize and promote that as well as focusing on their office business and squeeze every last penny out of that.

It might even be time for another management shakeup since Chief Executive Officer Steve Ballmer took over from Bill Gates a few years ago. Things haven’t exactly been great under his leadership.

(Copyright 2013 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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