Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Microsoft by the Numbers: What You Need to Know About the Post-Ballmer Era

By

A numerical recounting of exactly where Microsoft is following CEO Steve Ballmer's retirement announcement.

PrintPRINT

Wait a minute honey, I'm gonna add it up...
-- "Add It Up" (The Violent Femmes)

Following Friday's surprising revelation that Microsoft (NASDAQ:MSFT) CEO Steve Ballmer would be stepping down within 12 months, it's time to take a fresh look at exactly where this company is.

So we're stepping in with a mountain of numbers to assess Microsoft's position in a rapidly-changing world marked by growing domination of inexpensive mobile devices and Internet applications.

If you came to see every number you need to know about Microsoft, you're in the right place.

Let's get down.

Mobile

Microsoft has aggressively pushed into the mobile operating system and devices businesses.

As of the second quarter of 2013, the company's mobile operating systems held 3.3% of the global market for smartphones, according to Gartner. That's miniscule compared to Google (NASDAQ:GOOG) Android and Apple's (NASDAQ:AAPL) iOS, which held 79% and 14.2% of the market, respectively:



Microsoft-powered smartphones are actually the fastest growing in the market. At 83% year-over-year unit growth, they are slightly outpacing Android's 80% mark.

However, given that they are coming off such a small base (just 2.6% of the market the year before), should they be growing even faster?

On the tablet side, Microsoft's market share is also creeping up.

As with smartphones, Android is in the lead, with Apple in second and Microsoft in third place. Note that I have combined Windows and Windows RT for the purposes of this comparison:



As with smartphones, Microsoft is seeing high unit growth (527% year-over-year vs. 59.6% of the industry), but its market share is still very small at 4.5%, according to IDC.

And obviously, the recent $900 million write-down on the Surface RT indicates that this is not yet a healthy business for Microsoft.

The PC

For the second quarter of 2013, Gartner said global PC unit sales fell by 10.9%, marking a record fifth straight quarter of declining shipments. .

Gartner blamed inexpensive tablets for replacing low-end PCs, particularly in emerging markets.

Note that Microsoft's Windows division accounts for a whopping 25% of revenues:



The Windows division is also a major driver of operating income:



As you can see, for all the attention newer products like Bing and the Xbox gaming consoles get, virtually all of Microsoft's profits come from legacy lines like Business (90% of which is Microsoft Office) and Windows.

Now let's take a look at revenue growth by segment:



Windows grew by 5% last year, which seems weird given the collapse of the PC market. Note two things, though:

The Windows division includes the Surface tablet, which could have easily accounted for the 5% growth, which in dollar terms was $839 million. So that 5% growth number overstates the true momentum of Windows, which incidentally, was down 5% last quarter.

< Previous
Position in AAPL
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE