Microsoft profit dips on Windows 8 investment

Microsoft has reported a dip in profit as it increased marketing investment to boost sales and awareness of its Windows 8 operating system.

windows 8

The technology company launched Windows 8 in October as it looked to bring its software more in line with the touch and app-based technology of rivals such as Apple and Google.

The launch was backed with a series of global marketing campaigns which it said would help the brand “break from the past” and be more “motivating”, “emotional” and “culturally relevant” than previous campaigns. Investment in sales and marketing in the three months to 31 December rose 14.5 per cent year on year to $4.3bn (£2.7bn).

The increased investment in marketing appears to have dented short term profit from the launch. Although Microsoft reported record revenue of $21.5bn (£13.6bn) – up 2.7 per cent year on year – profit fell 3.7 per cent to $6.4bn (£4.1bn). Microsoft says it has sold more than 60 million Windows 8 licences since launch.

Steve Ballmer, Microsoft chief executive, says: “Our big, bold ambition to reimagine Windows as well as launch Surface and Windows Phone 8 has sparked growing enthusiasm with our customers and unprecedented opportunity and creativity with our partners and developers. With new Windows devices, including Surface Pro, and the new Office on the horizon, we’ll continue to drive excitement for the Windows ecosystem and deliver our software through devices and services people love and businesses need.”

Elsewhere, rival Samsung also reported results today (25 January). The Korean company’s profits surged 76 per cent to 7 trillion won (£4.2bn), which it owed to the continued success of its Galaxy range of smartphones, which outsold Apple’s iPhone for the fourth quarter in a row.


Ruth Mortimer

Our industry can help save the nation’s finances

Ruth Mortimer

Britain’s economy shrank by 0.3 per cent in the last three months of 2012. With the threat of a triple-dip recession on the horizon, it’s perfect timing for a report from the Advertising Association and Deloitte that claims that for every £1 spent on advertising in the UK, £6 is generated for the wider economy. Since annual ad spend hit £16bn in 2011, that equals an addition of £100bn to the UK’s gross domestic product.


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