Robert Pogson

I think M$ would rather keep this one quiet. That other OS is showing little growth in the latest quarterly report. The illusion that M$ has the answers for IT is all but gone. After the client division declines, whither goes the other tentacles of their nightmarish cash-cow?

Details:

• Unearned revenue for client division = $1.453 billion “Unearned revenue from volume licensing programs represents customer billings for multi-year licensing arrangements paid for either at inception of the agreement or annually at the beginning of each billing coverage period and accounted for as subscriptions with revenue recognized ratably over the billing coverage period.”
• Total revenue for the client division was $4.606 billion up 4% over last year’s quarter
• Revenue – Unearned Revenue = $3.153 billion
• This quarter, last year, Revenue – Unearned Revenue was $4.393 – $1.370 = $3.023 billion

So, even without the slight-of-hand involving drawing money from the slush-fund of unearned revenue, revenue for the client division is up 4%. What will they do when the slush-fund runs out?
“The following table outlines the expected future recognition of unearned revenue as of March 31, 2012:

“

M$ is getting twice the growth in licence revenues that IDC is seeing in PC shipments by OEMs. How they did that with a shortage of hard drives is beyond me. M$ says they had a higher attach-rate. Five years ago, when XP was old, M$ reported revenue for “client” of $5.279 billion, with unearned revenue of $2.684 billion. That’s incredibly slow growth for a bully like M$.

UPDATE I am not the only one surprised. The BBC reports that people were expecting a 4% decline in sales of that other OS…

Digitimes reports that China is a hotbed of PC production and consumption and that OEMs are jockeying for share, betting on “8″ and “ultrabooks” to advance their businesses.

Reality could be different than those expectations. The “others” category in China is huge and they are not shy to produce and ship GNU/Linux systems.

Digitimes makes the point that “8″ on ARM could produce cheaper systems. Well, GNU/Linux on ARM could produce much cheaper systems. The desire for small cheap computers makes the price of that other OS conspicuous. Units costing ~$100 today are much more problematic that the ~$1K systems of a decade ago.

For the same reason, ultrabooks may not sell as well as smaller cheaper computers. China is huge but it is still an emerging market with many first-time buyers, who are price-sensitive. I predict GNU/Linux and Android/Linux will do even better in the face of new production of ARMed devices. Any hesitance in the purchase of the ARMed units will cause a flood of units being shipped with */Linux at lower prices. ARM is a mine-field for M$.

see Digitimes – China PC market to enjoy healthy 13% growth in 2012, says IHS.