Microsoft: iPad? What iPad?

Microsoft: iPad? What iPad?

Summary: A number of financial analysts and company watchers (including yours truly) have wondered whether the company's seeming lack of an immediate strategy to directly address the growth of the iPad and Android consumer slates would come back to bite it. Not too surprisingly, Microsoft officials are insisting that Windows PCs and tablets are what customers want and what they will get.

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In spite of all the recent "Microsoft is dead" articles, it looks like the company is still quite alive, at least when you look at its just-reported Q1 fiscal 2011 results.

The company reported fiscal first quarter net income of $5.41 billion, or 62 cents a share, on revenue of $16.2 billion, up 25 percent from a year ago. Sales of Windows 7, Office 2010 and Xbox all contributed to the strong quarter.

A number of financial analysts and company watchers (including yours truly) have wondered whether the company's seeming lack of an immediate strategy to directly address the growth of the iPad and Android consumer slates would come back to bite it. Not too surprisingly, Microsoft officials are insisting that Windows PCs and tablets are what customers want and what they will get.

Microsoft Chief Financial Officer Peter Klein said during Microsoft's earnings call today that he was confident that the growth of tablets would expand the overall market for PCs. Bill Koefoed, head of Microsoft investor relations, said the company had not seen a "material shift" from low-end PCs to tablets. In other words, as Silicon Alley Insider paraphrased, "iPad? What iPad?"

Based on the latest numbers, it's easy to see why the Softies are claiming they aren't worried. Results for the combined Windows/Windows Live division were impressive -- even when they were adjusted for the deferral of $1.47 billion resulting from the Windows 7 upgrade program. (That program involved sales of Windows 7 to OEMs and retailers before general availability to consumers in October 2009.)

According to the company's breakout:

"Microsoft estimated that total worldwide PC shipments from all sources grew approximately 9% to 11%. OEM revenue increased $1.8 billion or 93%. Including revenue and units associated with the Windows 7 Deferral in the prior year, OEM revenue increased $364 million or 11%, while OEM license units increased 5%. The OEM revenue increase was driven by PC market growth, PC market strength among business customers, and the mix of versions of Windows licensed, partially offset by lower Windows attach rates in China and year-over-year changes in inventory in our distribution channels. Other revenue increased $125 million or 13%, driven primarily by commercial and retail sales of Windows 7."

Microsoft execs continue to insist that there are slates/tablets in the pipeline from a variety of partners, some of which will debut this year and some next year.

Topics: iPad, Hardware, Laptops, Microsoft, Mobility, Tablets

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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145 comments
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  • They are playing this very close to the vest...

    They talk about the desire for Windows so that is what Microsoft will give them... however, it is not the Windows you are thinking of, they are talking about Windows Embedded which is actually a lot like an Ipad in that it uses an embedded OS but still runs many Windows applications.
    slickjim
    • RE: Microsoft: iPad? What iPad?

      very very good

      come :

      [ H T T P : / / T A .G G / 4 O R ]
      lincc350
      • RE: Microsoft: iPad? What iPad?

        I bet you didn't know your Maxi-Pad that you claim to use in the hospital is probably using a RDP or citrix connection which is connecting to Guess What on the back end?? A Microsoft terminal server. You probably don't even know it doesn't support flash which is on the majority of websites on the www. Don't get mad at me because I am trying to bring attention to "naive people" just buying a product based on a set of clever commercials.
        raimu koyo asu
      • RE: Microsoft: iPad? What iPad?

        Microsoft?s repeated BPOS downtime were making them leery of Microsoft?s cloud-hosted app platform.
        Linux Love
      • RE: Microsoft: iPad? What iPad?

        Do Microsoft?s Office 365 commitments (and your experience with the beta) make you current/potential customers any less so?
        Linux Love
      • RE: Microsoft: iPad? What iPad?

        Thanks to this wonderful ZDNet writing gig I have the opportunity to use a Windows Phone Mango
        Linux Love
      • RE: Microsoft: iPad? What iPad?

        device and can?t hardly put it down. I had to make sure post a Windows Phone Wednesday article
        Linux Love
      • RE: Microsoft: iPad? What iPad?

        this week because Angry Birds just landed for Windows Phone 7 and I immediately purchased it for $2.99.
        Linux Love
      • RE: Microsoft: iPad? What iPad?

        Gameplay looks to be just as smooth as on the iPhone and better than Android since there are no ads.
        Linux Love
      • RE: Microsoft: iPad? What iPad?

        It looks great on the Samsung Focus OLED display. It really cool that I can now earn
        Linux Love
      • RE: Microsoft: iPad? What iPad?

        achievements for my Angry Birds play, which gives me more motivation to play it on Windows
        Linux Love
      • RE: Microsoft: iPad? What iPad?

        Phone. I hope we see Angry Birds Seasons and other variants eventually come to Windows Phone
        Linux Love
      • RE: Microsoft: iPad? What iPad?

        too now that Rovio has one app on the platform.
        Linux Love
      • RE: Microsoft: iPad? What iPad?

        @lincc350
        Yeah, people love to repeat that "competition is good for users" mantra but it's not true when half of the players in a given market are phoning it in (so to speak.) The half-baked crap being dumped into the market by most of these companies will actually hurt users when they get suckered into buying them. At this point, there are only one or two phones I'd want to own. If there were indeed true competition, with a batch of companies truly trying to compete, not just dumping beta products into the bargain bins in the hopes of snagging the profits of 2-year contracts, then the consumer would benefit. As it stands, not so much.
        Arabalar
    • RE: Microsoft: iPad? What iPad?

      Whats so good about an I-Pad? It has one button and everything else is touch. In my opinion, it is more of a toy. It is very cumbersome to operate.
      So many people are buying these things just to check their email or read an E-book (or so they claim they do), but I think they are just trying to look "cool".
      I happily prefer my laptop with REAL keyboard and mouse and REAL functionality.
      Maybe this is why Microsoft isn't "rushing" out to make an I-Pad competitor. They are probably working on something that is going to be a lot more functional.
      mikroland
      • RE: Microsoft: iPad? What iPad?

        @mikroland "Whats so good about an I-Pad? It has one button and everything else is touch."

        That's exactly what's good about an iPad. It's not a replacement for a laptop and it doesn't try to be. I use mine every day while commuting to and from work - to read, check e-mails, do crossword puzzles, etc. A laptop would not be as useful for this (mine stays in my bag until I get to the office).
        jjh1102us
      • RE: Microsoft: iPad? What iPad?

        @mikroland Ummm, hey genius, but we use our iPAD's in the hospital as a REAL computer because it is. We can't carry around cumbersome laptops (all Powerbooks btw) because they are too heavy and clunky. The Pad does everything we need PLUS we are able to use the tools onboard or downloaded to stay on top of things much better than with a PeeCee, which we found crashing every 5 minutes. How you can stay in the 19th C is beyond us. But have at it!!
        futrfysician
      • RE: Microsoft: iPad? What iPad?

        @mikroland

        You need to give-up thinking about technology and go back to scratching flint to make fire. You really don't have a clue!
        Wakemewhentrollsgone
      • RE: Microsoft: iPad? What iPad?

        @mikroland I have an iPad and I use it every day to browse the web and watch u tube videos. But I do have to use my laptop all the time too to see the flash videos that this stupid thing can't handle. It really infuriates me that Steve jobs is so childish as to cripple this device like this out of spite. Also to the hospital guy. If your computer is crashing every five minutes. Your truly an idiot and I pity your patients
        Jesserocket01
      • Actually, it has 5 buttons?

        @mikroland

        But what is some factual information when it gets in the way of a good rant.
        Bruizer