Microsoft: Windows OEM Revenue And Office Consumer Revenue Declined Last Quarter Due To Market Trends

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Windows 8.1 Update DownloadDuring its FY14 Q1 results announced yesterday, Microsoft reported a significant decline in the revenue from its Devices & Consumer Licensing segment. This segment includes Windows OEM licensing, Office for consumers licensing and Windows Phone licensing.  D&C Licensing revenue decreased $335 million or 7%, due mainly to lower revenue from licenses of Windows OEM and Consumer Office, offset in part by increased Windows Phone revenue. Windows Phone revenue increased $102 million, mainly due to increase in patent licensing revenue.

Revenue impacted by device market trends

  • Windows OEM revenue
  • Windows OEM Pro revenue, up 6%; second consecutive quarter of growth
  • Windows OEM non-Pro revenue, down 22%; several points better than expected
  • Excluding the impact of China, non-Pro revenue declined 17%

Office Consumer revenue

  • Revenue declined although attach increased in the quarter
    Impact of the shift to Office 365 Home Premium was generally in line with expectations

This is expected. Microsoft just cannot turn the tides in the segment which is affected by market trends where mobile devices are increasingly adopted by consumers around the world. Microsoft is in the process of acquiring Nokia in an effort to boost its mobile devices market share, and the new revenue model due to Nokia should partially offset the growing Windows Phone revenue in the coming quarters.

Source: Microsoft

About Author

Pradeep, a Computer Science & Engineering graduate.

  • hyperthermia

    Dear nokia/ microsoft

    where is my cyan lumia tablet running windows 8 pro with baytrail processor , pen slot inside the tab and with keyboard dock and full usb 3.0 slot for 399. Please thats all i need.

    • Bugbog

      The Asus Transformer T100 is close @ $350 (excluding stylus)

  • pinoyxp

    @hyperthermia the Nokia tablet with baytrail and windows 8 pro @ $399 is available right now as we speak, you can order it inside your head, in your dreams. You must be smoking something to think that you will find a tablet with the kind of specs that you mentioned at that price range when even the much less capable android tablets and the the ipads of the world can be found for at a much higher price point. $399 my a…

    • Iván Hernando V Góngora

      At least he doesn’t want it gold plated for the same price

  • John Scott

    I think cheap tablets will cannibalize the market with consumers. Tablets are still considered 2nd or 3rd devices. People need to realize that PC’s still sell way more then tablets. In 3 months the PC industry sold more PC’s then Apple sold iPads in 3 years. Yes, PC sales have slowed. But its still a driving force for computing. Microsoft needs to fix Windows 8 to make it more palatable to enterprise or face losing a big chunk of business to someone else. Microsoft’s recent numbers bear this out. Bing is a burden, the Surface is consuming too many resources. Microsoft needs to get out of hardware and back into doing software. Let the PC makers do the hardware.

  • SategB

    In plain English:
    Window8 is still not selling, people still buying iPads instead of PCs and we made Phone revenue IC
    increased because Android is selling so well that we make more out of Patent LC on it then WP8

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