Microsoft stuns with profit miss, job cuts

[drlunanerd]

* Fiscal Q2 EPS 47 cents, vs 49 cents estimate
* Says profit, revenue will likely drop in next 2 qtrs
* To cut up to 5,000 jobs, or about 5 pct of workforce
* Blames PC market weakness, shift to low-cost netbooks
* Shares down 9 pct

from Reuters

In stark contrast to Apple's figures announced yesterday.
Interesting that they claim netbooks are killing them - I assume the ones that ship with Linux distros are the "problem"?

 

[Sesshi]

More likely that Netbook owners may not be buying Office - not so much a Windows issue, as Linux netbooks are in the minority among the non-nerd buying contingent.

 

[notjustjay]

Yeah, that doesn't make sense. Most netbooks come with an XP license, and MS doesn't lose or make anything off the hardware sales.

 

[numbersyx]

This makes Apple's recent profitable performance even more impressive.

 

[GeekLawyer]

This makes Apple's recent profitable performance even more impressive.

I guess this is why AAPL is going crazy today. (In a good way.)

(Up about 8.5% at this time...)

 

[Consultant]

"Microsoft To Cut 5,000 Jobs"
https://forums.macrumors.com/threads/638804/

 

[talkingfuture]

I think this is what the analysts were expecting to see from Apple. Just shows what a range of strong products can do for you at a time like this. I think MS will claw something back when Windows 7 comes along though.

 

[surferfromuk]

I said it over 2 years ago - if MS turnover drops by 25% they will collapse under the weight of their own monstrous operating costs...

well, there goes the first 11%....if, by next quarter, it's dropped to say 18%, you'll see MASSIVE changes in MS ...huge layoff scheme (we'll be talking 20,000 next time), full division chopping and sell-off's, product shelving and panic...they simply won't have any choice...
...and right now I can't see anything on the horizon that's going to stop that happening...

These Netbooks must be killing MS because I really can't see they're getting their usual $40 per seat on them...and they're gonna blow on Vista 7 adoption in '09...it's just not going to happen..anyone who has sat out Vista is just going to wait it out till 2010...both for a R1 service pack and for sure signs of stability in the global economy...

Apple should release an Ipod Touch 7" to satiate this absurd Netbook market...won't affect Macbook sales - won't really affect classic Touch sales....that said I'd buy one for $500 to sit on the table by my couch...it'll be a better product than a Netbook ever would - a portable gaming device and something that will run a copy of iWork and store files...that's all that's needed extra...

Then let's not forget Apple forward momentum - they will be continuing to invest hugely in R&D whilst every other tech company is cutting costs and R&D...the quality and technology difference in about 6 months is going to become HUGE!

Apple just need to make sure Snow Leopard is a out of the box slam-dunk...even if it means delaying it two or three months...

I think 2009 is going to be interesting... Let's just hope Tim & Steve manage to keep the quality and the innovation rolling...

 

[wizzracer]

I bet they cut US job's then use the H1v Visa peeps to replace them

 

[Sesshi]

I said it over 2 years ago - if MS turnover drops by 25% they will collapse under the weight of their own monstrous operating costs...

well, there goes the first 11%....if, by next quarter, it's dropped to say 18%, you'll see MASSIVE changes in MS ...huge layoff scheme (we'll be talking 20,000 next time), full division chopping and sell-off's, product shelving and panic...they simply won't have any choice...
...and right now I can't see anything on the horizon that's going to stop that happening...

These Netbooks must be killing MS because I really can't see they're getting their usual $40 per seat on them...and they're gonna blow on Vista 7 adoption in '09...it's just not going to happen..anyone who has sat out Vista is just going to wait it out till 2010...both for a R1 service pack and for sure signs of stability in the global economy...

Apple should release an Ipod Touch 7" to satiate this absurd Netbook market...won't affect Macbook sales - won't really affect classic Touch sales....that said I'd buy one for $500 to sit on the table by my couch...it'll be a better product than a Netbook ever would - a portable gaming device and something that will run a copy of iWork and store files...that's all that's needed extra...

Then let's not forget Apple forward momentum - they will be continuing to invest hugely in R&D whilst every other tech company is cutting costs and R&D...the quality and technology difference in about 6 months is going to become HUGE!

Apple just need to make sure Snow Leopard is a out of the box slam-dunk...even if it means delaying it two or three months...

I think 2009 is going to be interesting... Let's just hope Tim & Steve manage to keep the quality and the innovation rolling...

Continued Superior Quality/Innovation? No. Continued Superior Marketing? Yes - and they have a big lead on that. Fine crafted BS goes a long way in IT, given that everyone else is so hopeless at it.

 

[surferfromuk]

Continued Superior Quality/Innovation? No. Continued Superior Marketing? Yes - and they have a big lead on that. Fine crafted BS goes a long way in IT, given that everyone else is so hopeless at it.

Experientially, in over 20 years using technology, I've never used better products than my iPhone and my '08 Macbook Pro...

...that's a real simple observation that anyone can make...no amount of web-ads made my iPhone sync perfectly, perform beautifully, and run like a handheld computer for $199 did they?

Don't get me wrong - there is a price premium for Apple kit, but the experience has been joyful and the right decision...

 

[IJ Reilly]

Continued Superior Quality/Innovation? No. Continued Superior Marketing? Yes - and they have a big lead on that. Fine crafted BS goes a long way in IT, given that everyone else is so hopeless at it.

Superior marketing? Where? Seriously, point me towards an example of Microsoft's outstanding marketing. The "Mohave" campaign? Butterfly Man?

The fact is, they've been the beneficiaries of the public's perceived need to lock into one family of solutions and never consider any alternatives. Microsoft hardly had to break a sweat to reap riches so long as that perception went unchallenged. As this perception starts breaking down, it's bound to hurt their bottom line. And as we've heard from Ballmer's ramblings, they really don't have a Plan B.

 

[drlunanerd]

Superior marketing? Where? Seriously, point me towards an example of Microsoft's outstanding marketing. The "Mohave" campaign? Butterfly Man?

He's referring to Apple, not Microsoft.

 

[mkrishnan]

More likely that Netbook owners may not be buying Office - not so much a Windows issue, as Linux netbooks are in the minority among the non-nerd buying contingent.

I think they might get less for the Windows XP licenses they sell for these computers than the Vista licenses they sell for more expensive notebooks and desktops, also.

Making $0.47 instead of $0.49 isn't such a huge deal. I do wonder three things though...

- What do sales of Office 07/08 look like?
- Where is profitability of the XBox portfolio going?
- And longer term, will MS be able to nail the launch of Win7, which to all accounts looks quite good?

 

[surferfromuk]

I think they might get less for the Windows XP licenses they sell for these computers than the Vista licenses they sell for more expensive notebooks and desktops, also.

Making $0.47 instead of $0.49 isn't such a huge deal. I do wonder three things though...

- What do sales of Office 07/08 look like?
- Where is profitability of the XBox portfolio going?
- And longer term, will MS be able to nail the launch of Win7, which to all accounts looks quite good?

But Win7 is realistically what Vista should have been in 2007...Can they compete with Grand Central or open CL? Really it's up to Apple to make sure Snow Leopard is flawless. They should hold it up a few months if not..

 

[notjustjay]

Netbooks partially to blame:

http://www.liliputing.com/2009/01/netbooks-partially-to-blame-for-microsoft-layoffs.html

 

[IJ Reilly]

He's referring to Apple, not Microsoft.

Then I suppose I have to disagree even more. I wasn't aware that Apple was winning over IT departments on any measurable scale and if you're arguing that Apple doesn't have an edge on innovation, then I'd have to ask, compared to who?

 

[notjustjay]

He's referring to Apple, not Microsoft.

No, I didn't get the impression that he was.

 

[Sesshi]

Then I suppose I have to disagree even more. I wasn't aware that Apple was winning over IT departments on any measurable scale and if you're arguing that Apple doesn't have an edge on innovation, then I'd have to ask, compared to who?

Oh I grant that they have enormous on innovation in marketing. The rest? Trinkets.

 

[chewietobbacca]

But Win7 is realistically what Vista should have been in 2007...Can they compete with Grand Central or open CL? Really it's up to Apple to make sure Snow Leopard is flawless. They should hold it up a few months if not..

Grand Central I'll give you, but Windows can use Open CL cause AMD and Nvidia are both supporting it and will certainly be accesible (along with DX11) in Windows. Either way, I agree that Snow Leopard will have to work flawlessly lest they want to see a hold in momentum.

 

[IJ Reilly]

Oh I grant that they have enormous on innovation in marketing. The rest? Trinkets.

So the Mac, the iPhone and the iPod are all just... trinkets?

 

[wizzracer]

The reason Apple will over take MS, The Total Cost of Ownership "TCO" long term favors Apple. Yes the cost up front is highier on the Apple Platform. But it's made up on the backend when you add up the savings, not having to buy loads of third party applications. Stable OS, less need for a large scale IT department.

I just started using OSX server and it maybe\could be Windows replacement. This is where Apple can cut deep into MS profits to the bone. As more people start getting comfortable with OSX, it will become a player in the server market in the longterm.

 

[Arcadie]

Then I suppose I have to disagree even more. I wasn't aware that Apple was winning over IT departments on any measurable scale and if you're arguing that Apple doesn't have an edge on innovation, then I'd have to ask, compared to who?

IT Departments? no but IT departments arnt the ones making the purchases.

I read a report about how purchasing apple minis and iwork licenses is actually cheaper than dells most affordable core 2 duo + Office.

It was in the neighrborhood of $8,000 per 100 computers purchased over 4 years. It is due to the low cost of iwork + the value a mac holds. The mac is expected to be worth almost $80 more than the dell with comparable specifications when it comes time to liquidate.

 

[Arcadie]

I think they might get less for the Windows XP licenses they sell for these computers than the Vista licenses they sell for more expensive notebooks and desktops, also.

Making $0.47 instead of $0.49 isn't such a huge deal. I do wonder three things though...

- What do sales of Office 07/08 look like?
- Where is profitability of the XBox portfolio going?
- And longer term, will MS be able to nail the launch of Win7, which to all accounts looks quite good?

$0.02 x 18B shares = $360,000,000

 

[surferfromuk]

Grand Central I'll give you, but Windows can use Open CL cause AMD and Nvidia are both supporting it and will certainly be accesible (along with DX11) in Windows. Either way, I agree that Snow Leopard will have to work flawlessly lest they want to see a hold in momentum.

...but isn't that the whole point of Grand Central to manage the allocation of processes between cores?

I'm no expert here so I'm happy to stand corrected, but isn't Open CL just a means to make the GPU cores available to the OS as if they were another CPU resource ?

Without a 'Grand Central' isn't Open CL of limited value?

As for anything promised in Windows 7 - it remains to be seen until it arrives doesn't it - especially in light of MS economic woes, and I remember Vista was going to be a million different wonderful things...whatever it eventually ships with, it'll still look like technicolor vomit.