Microsoft record drop in profit – Turn to Windows 8 for rescue

Even as Microsoft Corp. Is set to launch its new Windows and Office products, their quarterly profit has fallen by 22 percent, according to our reports. The fall in profit was greater that what was initially expected, as it Windows based computers did not meet sales expectations and some revenue was deferred.

Microsoft’s shares were seen to fall 1.3 percent in after-hours trading, as investors were caught by surprise by weak sales of companies’ personal computer. Trip Chowdhry, who is an analyst with Global Equities Research, said that it seemed like macro conditions had deteriorated and that no technology company would be immune to it.

Earlier in the week other major players also registered lower profits, including Google, Intel Corp and International Business Machines Corp, amidst slowing advertising. Apple Inc. has  an advantage over Windows based machines with their iPad device, as customers tend to favour the former’s product. According to research firm IHS, PC sales are expected to fall further this year due to a weaker economy as well as competition from the iPad.

With the drop in profit, Microsoft will be looking to their touch-based Windows 8 Surface tablet to help boost sales, so that they may be able to break out of their current profit model, which is based on PC sales running their Windows operating system.

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