Microsoft Q1 Revenue Down 6%: Blames Netbooks

Microsoft have announced their Q1 2009 financial results, and for the first time in 23 years the company has seen its profits drop.  Revenue from the three-month period was $13.65bn, down 6-percent from Q1 2008, with net income down 2-percent over the same period, to $2.98bn.  According to Microsoft, the culprit is the burgeoning netbook niche.

Sales of netbooks have been brisk – though perhaps not as much as manufacturers themselves might have hoped – but their general use of the cheaper Windows XP rather than Vista has punched a hole in Microsoft's profits.  In response, Microsoft have reiterated their launch schedule for Windows 7, targeted for release in the 2010 financial year, which should prove more capable on netbook-style machines.

Until then, though, Microsoft CFO Chris Liddell is predicting continuing weakness through "at least the next quarter".  In contrast, arch-rival Apple announced their own financial results earlier this week, the best in the company's history.  However that success was based more on iPod touch and iPhone sales performance than Mac sales, which actually decreased.