Microsoft’s Windows earnings slide due in part to Apple’s Mac OS X surge?

“Microsoft’s client revenue–Vista and XP came in below expectations–and the company cited three primary reasons: A tough comparison from year ago levels, OEM inventory build and piracy. But the elephant on the conference call may have been Apple and its Mac,” Larry Dignan writes for ZDNet.

“Microsoft’s three reasons for the client malaise are all legitimate. What’s curious is that piracy–always a big deal for Microsoft–was mentioned 12 times on the conference call by CFO Christopher Liddell and analysts, who were following the software giant’s lead. The takeaway: Microsoft is facing tough growth comparisons and any blip in piracy levels can be the difference between Vista and XP hitting Wall Street targets. If Microsoft didn’t need that extra percent of growth or two it’s unlikely we’d get a conference call where piracy chatter was dominant,” Dignan writes.

Dignan writes, “But let’s dig deeper: Could it be that the real elephant in the room was Apple?”

“It remains to be seen whether Apple can be a real enterprise player, but it doesn’t have to do much to be a thorn in Microsoft’s side. All Apple has to do is nibble and it will be harder for Microsoft to hit its client revenue growth targets–especially against tough comparisons,” Dignan writes.

Full article here.

46 Comments

  1. This may provide a clue too…

    I checked over at WDN, and this one is just too rich to pass by: “Upgrading from Vista to XP”

    Yes, that’s right, “UPGRADING from Vista to XP.”

    What’s even more interesting is that this guy is doing it on a (wait for it, wait for it) on a Mac!

    “Why?” You may ask yourself, especially when OS X works infinitely better on a Mac than Windows in the first place.

    Also, he lists himself as one Sean Corfield, Senior Computer Scientist and Team Lead in the Hosted Services group at Adobe Systems Incorporated.

    For all the hilarity, about the virtues of going back to the future, go here: http://www.windowsdailynews.com/2008/02/04/upgrading-from-vista-to-xp/#more-17

    nJoy!

  2. Apple resurgence is not enough to explain the drop of Microsoft. As far as I’m concerned, the huge Apple growth is equivalent to only a 1% drop of Microsoft worldwide market shares of the desktop OS.

    If someone can sink Microsoft, it’s primarly Microsoft itself, or perhaps a big shift of paradigm in the industry with the arrival of something brand new that will disturb the overall game. If Apple introduce something totally new that will transform the game, maybe, otherwise guys, stop dreaming, Microsoft is here to stay, just like hip hop and rock & roll.

  3. I can tell you this: if MS cancel sales of XP in June and the only alternative is Vista or a cut down version of XP Home then piracy levels of XP will go through the roof.

    Hollywood and the Music studios still have not learnt their lesson that you must give your customers what they want or they will get it any way they can. There is no reason to suggest MS has learnt this lesson.

  4. Mac+ “Microsoft is here to stay”

    I’m not one of those that says that Microsoft has to disappear. I just want them to have to *compete*.

    I don’t want MS the company to vanish, just MS the *monopoly*.

    If they *had* to compete and produce good products, perhaps they would? Unlikely, sure, but the company would undoubtedly look very different if they really were forced to compete on their OS to survive.

  5. Nothing would make me happier. Still highly unlikely that MS will falter anytime soon. As long as they are allowed to continue to operate as a “MONOPOLY”, they will continue to own 90 + percent of the global market. Sad.

  6. Not sure if “Microsoft is here to stay”, at least in its current incarnation. They need to reinvent themselves in order to succeed in the future. Clearly they are on the wrong path with their operating system roadmap. The Office apps indeed are going to be around for awhile, so in that vein, MS will be around.

    One thing’s for sure – why is Ballmer still around? He should have been fired years ago.

  7. I said it earlier I’ll say it again.

    Ballmer said it, “Vista is a work in progress.”

    With Microsoft it’s always just wait till the next service pack, Next version, Next everything and when it comes out and is the same old same old.. it’s the same story over and over and over again at Microsoft. Just wait for the next…

    People are tired of waiting for what they what and for what works. Because waiting is not good enough any more… The Next service pack, the next version, the next…

    For average users and IT organizations big and small the waiting is over… I hear it more and more … They are evaluating their options.. Linux, Solairs, MacOS… they are all on the table… I hear it from more and more IT Managers, we’ve been tasked by the CTO to work out a plan for the phase out of all Windows servers and Desktops… can you help us develop a plan to migrate and retain our IT staff. My answer is always the same, yes, when do you want the migration completed and what applications does your enterprise use. For ever Windows Application their is an equal and 99.9% of the time a better Application on another OS.

  8. to Flappo:

    You sound like one of those people to whom OS 9 was so much better than OS X and each new ‘cat’ was worse than the previous.

    I cannot imagine going back to Tiger. Occasionally, I have to sit in front of a Tiger machine and am often annoyed by the lack of Stacks, Spaces, and, most of all, the Quick Look, among other things. On my machines (Core Duo iMac, Core 2 Duo MB), Leopard is noticeably faster than Tiger used to be. On my friend’s G4 PowerBook, even more so. I can’t think of any one thing that I miss from Tiger.

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