Overall, a good quarter for Microsoft. Revenue was up 6% year-to-year thanks largely to the Server & Tools Division and the Business Division (read: Office).
In other words, the quarter was driven by the enterprise side of the company.
Windows growth was up slightly (4%), but that’s probably to be expected as Windows 8 nears. And Microsoft specifically called out the strong enterprise growth there as well.
On the full-on consumer side of things… the Entertainment & Devices Division (read: Xbox) saw revenue decrease 16% year-to-year. That’s not good. While Xbox was the top-selling console for the 15th straight month, the company cited a “soft gaming console market”.
For the quarter, the division actually swung to a loss — $229 million in the red.
A new Xbox can’t come soon enough for the company. And it’s not gonna happen until next year.
But hands-down the best part of the release is this:
The Online Services Division reported revenue of $707 million, a 6% increase from the prior year period, and operating loss improvement of approximately $300 million.
“Operating loss improvement”. That’s one way to put it.
In English, the Online Services Division continues to bleed: it lost $479 million last quarter. An improvement, yes — but mostly thanks to less costs. Revenues were only up $40 million.
Verizon sold 6.3 million smartphones last quarter. The quick breakdown using my math skills:
3.2 million iPhones.
3.1 million non-iPhones.
Android is still winning by some metric, I’m sure. Ridiculous phones sold with styluses, perhaps? Wait, no, that’s AT&T.
Also note that 3.2 million iPhones is a drop from the 4.3 million iPhones Verizon sold last quarter — which isn’t a surprise given that last quarter was the holiday quarter and the first quarter the iPhone 4S was on sale. These numbers seems in line my iPhone sales prediction.
But, as Eric Slivka notes, the iPhone 4S also went on sale in China and on China Telecom for the first time last quarter. This may offset the holiday drop-off in the U.S. We’ll find out next week.