Windows’ 85% Margin

From NYTimes: “Microsoft has revealed for the first time that it has made profit margins of 85 per cent on its Windows system while its remaining businesses made losses, raising questions about the benefits of the group’s costly efforts at diversification. The client division, which markets Windows, generated operating profits last quarter of $2.48bn on revenues of $2.89bn, implying margins of 85 per cent.”

Some other figures:

Among Microsoft’s other businesses, the home and entertainment di vision, which includes the Xbox games console, lost $177m in the quarter on revenues of $505m. Salomon Smith Barney estimates it loses about $120 on each console it sells.

MSN, the internet service provider and portal, lost $97m, down from losses of $199m in the same quarter last year, on revenues up from $431m to $531m.

The business solutions group, which provides software for small and medium-sized businesses and includes recent acquisitions Great Plains of the US and Navision of Denmark, lost $68m on revenues of $107m.

And the CE/Mobility division, which includes mobile telephone software and the Windows CE operating system for handheld computers, lost $33m on revenues of $17m.

The Information Worker division (which comprises MS-Office) had revenues of USD 2.38 billion, with profits of USD 1.88 billion (79%). Adds “The business units making up Windows and Office brought in $4.88 billion in profits for Microsoft. But $830 million in losses for the four other divisions reduced earnings to $4.05 billion, according to Microsoft’s 10-Q.”

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.