Record loss also fuelled by weak PC demand; layoffs confirmed | Most recent Microsoft NZ result.
Chris Keall talks about Microsoft on NBR Radio and on demand on MyNBR Radio.
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Microsoft has reported a record quarterly loss after writing down 80% of the value of its $US9.4 billion purchase of Nokia's handset business.
Including the writedown, the company was $US3.2 billion in the red, compared to a profit of $4.61 billion in the year-ago quarter.
However, after stripping out the Nokia charge, earnings were ahead of analysts' expectations.
Revenue fell 5.1% to $22.18 billion, with the company blaming weak PC sales for the fall.
Microsoft releases Windows 10 next week.
Unlike previous Windows upgrades, the new version will be free.
However, chief executive Satya Nadella says the new software will help boost the PC market overall. He also sees the new software helping Microsoft in the mobile phone market, where he says the company will turn around its fortunes. Despite the layoffs and killing the Nokia brand, Mr Nadella says his company is committed to the smartphone market and will release more models in its Lumia (formerly Nokia Lumia) series before the end of this year – albeit this time focusing on the high end of the market.
So far, Microsoft has failed to crack more than a single-digit percentage of the phone market. Earlier this month the company said it would lay off 7800 staff, close to 7% of its workforce. Most are employees brought on board with the Nokia purchase.
Microsoft New Zealand doesn't break out quarterly earnings, and the picture is murked by some cloud services being booked offshore. But for the year to June 30, 2014, the local business reported revenue of $86.6 million, a 10% increase from last year. Net profit was $9.3 million – an increase on the prior year's $8.0 million.
Departing Microsoft NZ boss Paul Muckleston says inhouse and market research indicates Windows Phone has cracked the 10% mark locally, putting it ahead of the global pace.
Microsoft NZ now has 250 staff, which was bumped up with the purchase of Green Button a year ago.
The layoffs are unlikely to have a big impact on Microsoft New Zealand, where just two Nokia staff joined the company after the acquisition (most of Nokia's handset staff being based across the Tasman).
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