During Microsoft third quarter fiscal year 2015 earnings call, the software giant revealed new details on how well Windows performance in the quarter, and it appears that revenue generated by the OS is on the decline.
It appears that in general, Windows OEM revenue has declined by 22%. Specifically, that’s a 19% revenue decline for Windows OEM Pro versions as many businesses have already upgraded following the Windows XP end-of-life. Additionally, Microsoft attributes the lower revenues to the declining business PC market. As for the Windows OEM non-Pro revenue, the decline of 26% is reportedly due to channel inventory drawdowns and the introduction of free versions of Windows on devices smaller than 8-inches.
“Windows volume licensing revenue declined 2% (up 1% in constant currency), with transactional revenue declining following the XP refresh cycle partially offset by annuity revenue growth”
Making Windows free for small devices seems to be a double-edged sword. On one hand it hurts Microsoft in the short term, but on the other in allows for the introduction of the very affordable small tablets we’ve seen of late. This would allow Microsoft to regain the profits from more people using its services in the long-run. Let us know what you think of Microsoft’s strategy here and the latest Windows performance numbers in the comments below.