eWEEK content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.
Microsoft is set to announce its latest quarterly earnings after the market closes Jan. 27.
Analyst estimates posted by Thomson Reuters suggest the company’s overall sales will hit $19.15 billion, a slight year-over-year uptick, and $5.93 billion in profit. Should the latter number come to pass, it would place Microsoft behind longtime rival Apple, which just posted $6 billion in profits for the most recent quarter.
By comparison, Microsoft’s last set of quarterly earnings included revenues of $16.20 billion and a net income of $5.41 billion. During an Oct. 28 earnings call, Microsoft claimed strong year-over-year growth in all business segments, including servers and Xbox.
Granted, the Apple-Microsoft matchup is somewhat inexact-the latter focuses mostly on software, leaving hardware manufacturing to its partners, in opposition to Apple’s hardware-and-software model-but the blockbuster success of the iPhone and iPad have still put Microsoft on the defensive. The recently released Windows Phone 7, along with the presumed appearance of more Windows-powered tablets on the market within the next few quarters, will form the core of Microsoft’s attempts to make a more definitive statement in the tablet and smartphone markets.
Even as Microsoft plays catch-up in those burgeoning consumer markets, the company can likely take heart in the business-software side of its operations. As the enterprise and SMBs continue to recover from the recent global recession, IT departments across the nation have spent more on PCs and other hardware-buoying sales of Windows 7, one of Microsoft’s flagship products and prime revenue generators, along with those of Office 2010. Microsoft will likely tout its Windows 7 sales during the call, following a trend extending back to the operating system’s release in October 2009.
Microsoft will also likely cite a rising number of clients for its Windows Azure platform, although its online-services initiatives have yet to generate substantial cash-flow. The company is betting millions of dollars and substantial human resources on an “all in” cloud strategy, which has placed it in fierce competition with Salesforce.com and Google for business and government clients.
The company is less likely to discuss its roadmap for the next version of Windows, which will support system-on-a-chip (SoC) architecture, in particular ARM-based systems. Windows currently dominates the x86 platform leveraged by traditional PCs, but the rise of mobile devices that leverage ARM architecture-in particular, tablets and smartphones-offers both a potential threat and market-channel for Windows software.
During this January’s Consumer Electronics Show in Las Vegas, CEO Steve Ballmer highlighted the ARM development. “We made the announcement now in order to allow all of our partners to work together and build upon this innovation,” he told the audience during a Jan. 5 keynote. “Windows support for SoC is an important step for Microsoft and for the industry.”
Microsoft could cite Windows Phone 7 sales, to a point. In recent days, the company has confirmed that some 2 million devices using its mobile software platform have been sold by manufacturers to retailers. However, both Microsoft and its carrier partners seem reluctant to discuss consumer sales in any depth.
If Microsoft does use the Jan. 27 earnings call to talk smartphones, it will likely point to research data suggesting that some 93 percent of Windows Phone owners are either “satisfied” or “very satisfied” with the device. Consumer sales numbers, though, may continue to prove elusive.