Wednesday, July 31, 2013

Microsoft Continues Death Spiral

Last week I wrote about Microsoft starting a death spiral. Among other things, Microsoft announced a $900 million charge related to a discount of Surface RT tablets. Well, today's SEC filing should add to the speed of that spiral.

Microsoft revealed that for the fiscal year ending June 30:
  • Sales and marketing expenses increased $1.4 billion or 10%, reflecting advertising of Windows 8 and Surface.
  • Surface revenue was $853 million. 
  • OEM revenue decreased 3%. Excluding the impact of the Windows Upgrade Offer, OEM revenue decreased 10%. This decrease primarily reflects the impact on revenue of the decline in the x86 PC market, which we estimate declined approximately 9%.
Advertising costs clearly are larger than revenue from the Surface.

There will of course be a huge amount of press on this, but here are some of the best so far:

Microsoft Reveals Revenue From Surface Tablet - Digits - WSJ

Microsoft reveals true size of its Surface tablet flop - MSFT AAPL - Investors.com

Microsoft Filing Reveals Surface Financials | Paul Thurrotts WinInfo content from Windows IT Pro

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