“Windows Division revenue decreased $598 million or 13%, primarily reflecting the deferral of $540 million related to the Windows Upgrade Offer announced in the quarter. The offer provides consumers who buy qualifying Windows 7 PCs the option to purchase a downloadable upgrade to Windows 8 Pro for an estimated retail price of $14.99 during the promotion period. Qualifying purchases must be made between June 2, 2012 and January 31, 2013, and offers must be redeemed by February 28, 2013. The deferral impacted only the timing of revenue recognition and not cash flows from operations during the periods reported.”
M$ is finally recognizing that an OS is a commodity these days and $15 is a reasonable price to pay for a licence. The question remains how long they can continue to sell licences without a discount after 2013. The losses will mount if they have to discount everything.
OTOH, their revenues from other software products continues to rise but much of it depends on that other OS. It’s a house of cards.
see Press Release.
17485
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206
3
2
23933 
11870 
11722 
4636 
4268 
1642 
198 
14 
2 
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0 
Pogson, Posgon… MS did the same when 7 came out. All Vistas, purchased within several months prior and after the release of 7, were eligible for an upgrade of a minimal fee (media + delivery costs).
Nothing new. No sensation. Just normal business.
Phenom Partly correct. But really even 15 dollars is too much.
Vista you could go and download the media for free and not pay that extra fee if you had the purchased the vista at the right time.
Historically windows 95 to 98 is when this freebie started. This time MS has pulled the freebie. First wanting to charge 40 dollars now down to 20 dollars. Will MS wake up a person has just purchased a machine they are normally not interested in spending extra money on software at that point.
This action is showing MS is worried that the PC market is not expanding.
Phenom wrote, “MS did the same when 7 came out.”
They did that so that people who wanted XP would not stop buying PCs. Those people bought PCs intending to use XP but the discount for “7″ did not affect their buying decision. The difference now is that there is more doubt that “8″ will sell than “7″ ever had. Few end users want their GUI to change just so M$ can sell another licence. Few end users want to learn a new GUI. The changes to GUI that “7″ made were minimal in comparison. The PC was doing the hard work of transparency etc. not the user. Three years later, “7″ is just catching up to XP in usage. Will “8″ ever catch up considering that many apps are not ported to “8″?
reflecting the deferral of $540 million related to the Windows Upgrade Offer
Did you somehow miss the impact of the move, Mr. Pogson? Ordinarily you would have been on about Microsoft “ripping off” consumers here.
What the announcement means is that Microsoft is not recognizing some $540M in revenue, about 2 weeks worth, in anticipation of a lot of people who have just bought a computer with Windows 7 installed wanting to get their hands on a copy of Windows 8. So they charge them $15 for the upgrade, if and when they actually do it, but they got the full price for Windows 7 to begin with and have that money in the bank if not on the books.
At the end of the day, Microsoft will get their customary license fee, thought to be around $50, plus the $15 upcharge. That doesn’t smack of any desperation on their part, rather it is a way to cash in on the eager anticipation that users are showing while not stifling current sales of Windows 7. Not a bad move at all.
Clarence Moon wrote, “At the end of the day, Microsoft will get their customary license fee, thought to be around $50, plus the $15 upcharge.”
…or not. Those may be the last dollars M$ ever gets from many organizations and individuals as people all over the world discover alternatives to the Wintel treadmill. Remember ARM. M$ will not do much on ARM but the world is producing and consuming more ARMed PCs than Wintel. Nothing prevents those users from obtaining monitors, keyboards and mice for their machines or OEMs from installing */Linux on x86/amd64 machines.
Clarence Moon
“At the end of the day, Microsoft will get their customary license fee, thought to be around $50, plus the $15 upcharge. That doesn’t smack of any desperation on their part, rather it is a way to cash in on the eager anticipation that users are showing while not stifling current sales of Windows 7. Not a bad move at all.”
It is a bad move. There was a reason why MS use to allow upgrading for free if you were inside a particular time of a OS release. This prevented people putting off purchasing.
Result will be a bad effect on Windows 8 uptake. Since you can bet a lot will not do it for a 15 dollar change that would have if free.
Lower uptake slower developers of applications have to support the new version. Microsoft introduced the free after windows 3.11 to windows 95 stuff up.
Microsoft has basically forgotten after all these years why the upgrade was free. If the same factor is still in existence the results are going to be bad. Time will tell if this idea for charging for the upgrade is a good or bad idea. Historically it was a very bad move.
Microsoft thinks they will get away with it because Apple is getting away with it with OS X. Both are in different market segments. What OS X market accepts the Windows PC desktop market can completely reject.
Clarence Moon history knowledge tells you what MS had just done is a risky move that might not pay off. Taking a risk of ruining the uptake of a OS while android is doing as well makes me wonder how worried Microsoft really is about there bottom line.
Remember Microsoft just posted its first major lose in income since it was founded.
“They did that so that people who wanted XP would not stop buying PCs.”
Gee, how did you make this one up?
Let me try once again: MS offered people, who just bought a laptop / PC with Vista an upgrade to 7 for $15 or so. The downgrade to XP was discontinued long-long ago.
Spam. Sigh.
Those may be the last dollars M$ ever gets from many organizations and individuals as people all over the world discover alternatives to the Wintel treadmill.
It seems to me that you have been saying this for years and years, Mr. Pogson. Do you really believe it? As much as you protest, the world keeps plodding along on this “treadmill” oblivious to the notion that they are oppressed.
I would think that a person as rational as yourself would formulate another theory that better fit the facts. I had previously pointed you to the Product Life Cycle information that is one of the things basic to product marketing and it should soothe your need to see Windows eventually disappear but give a more likely prediction of how fast and when and even why.
Hey, fellas. It’s not 1995 anymore. I know, I keep saying that but it’s just a reminder that Microsoft is in a different world now. A very different world. The only thing that’s the same is Microsoft. Well, acting the same. They still think they can bully their way to success. It’s not happening, otherwise they wouldn’t have reported their first quarterly operating loss. There are many other signs of distress in the Redmond Behemoth but the Cult of Microsoft will debate them into oblivion.
“spam” should be added to the spam filter.
Phenom
“Let me try once again: MS offered people, who just bought a laptop / PC with Vista an upgrade to 7 for $15 or so. The downgrade to XP was discontinued long-long ago.”
The last 6 months before windows 7 release upgrades here in Australia from Vista to 7 were free as long as you were willing to use download media from Microsoft and willing to accept on line provide of product key. This was on the packaged certificate for upgrade.
The 15 dollar claim for Vista to 7 here is bogus Phenom at least for Australia. This is also how it was for most of the Asian region. Yes Australia Microsoft disc supply comes out of Singapore.
There are 4 Microsoft disc production locations world wide. 1 in china 1 in Singapore. 1 in Europe and the USA. Never bothered with exact locations of ones I don’t order from.
Phenom there is some times difference in terms at migration between the 4 production locations. It would be interesting to know what production location you owned to where the upgrade from Vista to 7 was not free.
Phenom
“The downgrade to XP was discontinued long-long ago.”
http://www.microsoft.com/oem/en/licensing/sblicensing/pages/downgrade_rights.aspx
This makes me completely not trust you. Windows 7 downgrade rights to XP is still valid to be used today. If your version of Windows 7 is professional or higher.
Yes downgrading Windows 7 home and starter was never possible. So the downgrade rights have not changed at all from when Windows 7 was released. There was talk about stopping it but it has not been stopped.
If software makers like microsoft cannot make a profits from os, then soon all hardware manufactures will be like apple making soft linked only to a single device.
This is a bad sign of the times
At $15, M$ can make a profit from its OS. The cost of developing such an OS is a few $billion at most. $1.5billion / $15 per PC = 100 million PCs. They sell that many licences in six months. The world does not owe M$ fabulous riches. M$ should work for a living.
Yes, this may work for Microsoft, but smaller software companies will be squeezed out of the market.
MS can afford smaller margins due to high volume, but small companies cannot.
Ironically this favors MS in the long term.
Tar
“MS can afford smaller margins due to high volume, but small companies cannot.”
This statement is false.
Ex Nokia staff now behind Meego just got a contract in China for phones. Boot to Gecko from Mozilla just got a contract in Brazil for phones.
Android got contracts everywhere.
Smaller players based on Linux are still able to move and play quite well.
Heck even http://makeplaylive.com/ Kde Vivaldi Tablet has sold out. Even that they were selling the device about 60 dollars above the market price of the same tablet with Android to get some funds for KDE. Yes I am not kidding it was exactly the same tablet right down to colouring only thing different the in loaded firmware and that it was unlocked.
Long term small margins favour FOSS. Reason Kde Vivaldi, Meego and Boot to Gecko all share the same kernel as Android so they just require an android device flashed with a different firmware to enter market. So large volume hardware is produced for Android is quite cheep to get that with custom firmware running something else Linux since that is what carriers order anyhow. Basically its not a extra cost to the carrier. Yet it allows them to look like in shops having more competition.
Tar
“If software makers like microsoft cannot make a profits from os, then soon all hardware manufactures will be like apple making soft linked only to a single device.”
I guess you can see where this is wrong. Hardware makers will be making Linux compatible devices because they can ship that hardware out more doors even re-branding it.
Carriers will want to appear to have few different options of customers. Linux times 3 on shelf customer will think they got to look at many different products even that they were all blood related. Also carriers will want to appear to have some of there own brand stuff on shelf right down to custom OS. Now of course that carrier custom OS could all becoming from different hardware makers.
Yes suit carrier down to ground change carrier no longer able to update you phone and the carrier gets a cut out of every application you buy.
Even debian is currently working on a mobile phone edition. Welcome to the world of wacky. Not only will Linux users have there favourite OS on there desktop it will be in there phones as well and possibly everything else with a computer in there house.
Basically the future is not about hardware makers being dominate at all Tar. Its going to be the carriers who are quite dominate and the hardware makers being quite flexible. So the up coming surface tablet by Microsoft I would not be surprised if that turns up as a android and other Linux tablets under different names and different colouring.
FOSS development will be quite happy on small margins. Microsoft on the other hand who has to try to get access to hardware companies to have drivers made is going to be quite problematic and quite expensive.
Linux shared cost.
Its also that the Linux guys have not stopped there cloning ways either. http://crna.cc/magenta.html iOS without apple on a generic Linux kernel. Now this is trouble for apple future.
Really think about it if a hardware maker spit out 1 million units. Do the hardware maker really care if 100 000 of them have meego 100 000 of them have B2G and 800 000 of them have android. Hardware maker only had to develop one set of drivers to support those 3 OS’s. So cost to hardware maker don’t change. Most important thing to hardware maker is the 1 million units go out door.
Now remember carriers could currently order 100 000 of X phone with there custom firmware. The smallest order is 20 000 in fact. So in this Linux friendly hardware 20 000 lots could go out the door to different distributions and firmware and the hardware maker really would not care. As Uoya just proved is possible to have the FOSS world preorder 30 000 plus.
Tar Microsofts margins are not small. FOSS world is offering people the chance at personalised.