Microsoft Decides To Take A $900M Charge On Surface RT Tablets

The company announced a $900m charge for inventory writedowns in its quarterly results on Thursday night – a step was already taken by adding in $782m of revenues from people upgrading Microsoft Office. The company’s revenues grew by 11% to $19.9bn, while its operating income was $6.1bn – a fall of 5% compared to the same figure, excluding a $6.3bn writeoff, a year ago.Its shares dropped 7% in the next days in after-hours trading. Microsoft missed analyst targets as well.

The company underwent a great re-organisation after the fiscal quarter in which chief executive Steve Ballmer aimed to focus it on both hardware and software, and set out the company along functional rather than product-based lines.

Ballmer quoted in an interview that they are working day and night to deliver compelling new devices and high-value experiences from Microsoft including new Windows 8 series tablets etc .But it was the PC business and PC world, on which Microsoft’s success was initially built,which was not that effective. Although Microsoft is protected from the continuing decline in the PC business by customers who buy Windows upgrades when they are needed. But around half of the PC market is surrounded by consumers all over.

Moreover Windows division profits more than halved, from $2.4bn a year ago to $1.1bn. Microsoft officials said that it thought the business market had returned to modest growth but that the consumer PC business “remains challenged and declined again this quarter.

The software king ‘Microsoft’ had a bumpy ride in which its consumer-facing businesses – its Online Search division and Entertainment & Devices division both lost a great sum of money also its Windows division saw a great reduction of about $281m, or 6%, after adjusting for deferred revenue from Windows upgrades the year before. That showed the picture of reduced PC market proven by the fact that the worldwide PC sales have fallen for the past five quarters.

But the good news was that the Office division, which provides the widely used suite of programs, and the Server and Tools division, saw strong growth in profits and revenues.

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