How Microsoft Got Windows Revenue to Go Up Despite PC Sales Going Down
How, exactly, did Microsoft do it? It’s like a magician’s trick. The raw numbers for Windows revenue in Microsoft’s Windows division were very substantially up - from $4.633bn (£3bn) in the first three months of 2012, to $5.7bn in the same period this year.
That’s a 24% increase, at a time when we’ve been hearing that PC sales have slumped. How has Microsoft done this? Has Steve Ballmer invented antigravity?
Sadly, no (though it would make a great new business line).
Make no mistake: Windows is still incredibly important to Microsoft. In this quarter it generated 27% of revenues, and 45% of profits. But how is it doing so well when the PC business is so dismal?
Here’s the first part of what happened. In June, Microsoft offered a scheme where people who bought a Windows 7 PC could update it to Windows 8 for just $15. The scheme ran through to December, and only after that could all the money received in it be cashed in. That gave a $1.1bn boost in “deferred” revenue which was really earned in the preceding six months, but couldn’t be recognised then.
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