Its quarterly results time and though most of the tech companies have done good so far, there are some which are showing
worrisome trend. Microsoft reported yet another record quarter, but if look a little deeper, then things do not look so good. While, Microsoft reported 31 percent higher net profit, but for the first time in 20 years, it failed to run past Apple, which had reported astounding 93 percent growth in its net profit last week.
Apple surpassed the Redmond company by posting $5.99 billion in net profit, whereas Microsoft managed only $5.23 billion. Just last quarter, Apple had trailed behind Microsoft by some $600 million. In this quarter, Apple released much awaited Verizon iPhone and iPad 2, while Microsoft came up with, ummm, well nothing worth mentioning, that is if we do not count its newly minted partnership with Nokia. In any case, Nokia alliance is only expected to start paying off in 2012, if at all.
Another worrisome factor for Microsoft is the 4 percent decline in revenue from Windows. Since, the company's smartphone business is barely scraping by, and its search business is no better, Windows is the one of the very few trump cards held by the company. In such scenario, if even the Windows sales are dipping, then Microsoft needs to realize that it needs to deliver and do it real soon. However, in this quarter, Office sales come to the company's rescue.
After the results, the industrial experts started their scrutiny and most of them agreed that the company needs to come up with solid tablet strategy since its fledgling PC business is getting pummeled by the handheld device. While Xbox 360 helped in meeting overall revenue target, but the game console has been widely criticized for straining profit margins. And there is a factoid which truly makes you scratch your head violently. According to its financial statements, Microsoft spends 14 to 15 percent of its revenue on research and development, in comparison to less than 3 percent ratio for Apple. Somebody might want to visit Microsoft Labs and see what the hell they actually are doing with all that money, especially, given the fact that the company was not even able to deliver its pre-update update for WP 7 properly. So, where do you think the company is heading to?