For the first time in 23 years, Microsoft has announced a quarterly sales drop of 6% comparing to the previous year. Most of its profit is made by selling its operating system Windows and its business software, like Microsoft Office. The sales drop resulted from a fall of sales of personal computers bought by consumers and businesses.
According to Steve Ballmer, Microsoft’s chief executive, the bad news is a result of the downturn in the world economy. They expect the weakness will last at least till the end of the next quarter. The situation is worse than analysts had been expecting. It looks like the demand and consumer preference had reached their maximum. But there are also positive elements, Microsoft is controlling costs and getting that under control.
To solve this issue, Microsoft has cost-cutting plans. Last January, Microsoft announced a disappearance of 5,000 jobs over the following 18 months.
Businesses all over the world are suffering from the financial crisis. So it’s quite normal, Microsoft is also having problems. According to me, the situation is not very alarming. In times of a bad economic market, sales figures are falling in all areas.
The job losses are more alarming. Certainly in countries with a bad system of social security. A lot of families will have problems.
Source: http://news.bbc.co.uk/2/hi/business/8015623.stm
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I am actually very pleased with this news. Me myself don't feel really sorry for a company like Microsoft. Their profits are way too high. The cost for Microsoft to produce one version of Microsoft Windows is about 5$, while they sell it in stores for atleast 100$. No mercy for Microsoft if you ask me, I'm glad they're having problems because of the crisis.
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