Microsoft by the Numbers: What You Need to Know About the Post-Ballmer Era
A numerical recounting of exactly where Microsoft is following CEO Steve Ballmer's retirement announcement.
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.
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.
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.
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