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TECHNOLOGY A23
Saturday 30 January 2016
Tech Talk:
Microsoft earnings show effects of turnaround strategy
BRANDON BAILEY year ago, but after adjust- flop, which hurt PC sales grade for older PCs, with no said Frank Gillett, a tech
ing for deferred revenue even more. charge for future updates. analyst with Forrester Re-
AP Technology Writer and one-time costs, the Nadella, who was named It’s also redesigned other search. He said that should
numbers were better than to the top job in 2014, has popular products, such as give Microsoft more oppor-
SAN FRANCISCO (AP) — Wall Street analysts expect- been pushing Microsoft to the Office word-process- tunities to make money by
ed. Microsoft beat Wall adapt to a world where ing and spreadsheet pro- selling premium features or
Like a friendly but persistent Street’s estimates for sales people are increasingly us- grams, to work as mobile apps, such as online stor-
in key segments. Those in- ing mobile gadgets, and apps for devices running age, Skype minutes or mu-
sales rep, Microsoft has a clude its cloud-computing where businesses are mov- operating systems made sic and games.
segment, which lets com-
message for anyone who mercial customers run
their businesses on Micro-
owns a personal comput- soft’s servers, and the divi-
sion that sells PC software,
er: If you haven’t yet up- Surface tablets and Xbox
gaming consoles. Adjusted
graded to Windows 10, the earnings amounted to 78
cents a share, while ana-
company highly recom- lysts polled by FactSet had
expected adjusted earn-
mends it. ings of 71 cents a share.
“All around, this looks like
So highly, in fact, that in a quarter that (Microsoft
CEO Satya) Nadella can
coming weeks, PC own- frame and put in his office,”
FBR Capital Markets analyst
ers who have set their ma- Daniel Ives said. Microsoft’s
stock rose more than 3 per-
chines to automatically cent in extended trading
after the results came out.
install important updates — Long a dominant seller of
PC-based software, Mi-
like security fixes — could crosoft has seen its profit
decline as consumers and
find the new operating sys- businesses buy fewer PCs,
cutting into licensing fees
tem already downloaded Microsoft gets from com-
puter-makers. The last ma-
and ready for activation. jor upgrade of its operating
system, known as Windows
Microsoft’s aggressive 8, was widely viewed as a
campaign to promote Win-
dows 10 has led to its de-
ployment on more than 200
million devices since its July
release. It’s part of a multi-
pronged strategy, along
with a push to expand in
“cloud” computing, that
analysts say is driving the
early stages of a financial A man walks past a Microsoft sign set up for the Microsoft BUILD conference at Moscone Center in
San Francisco. Microsoft reports financial earnings on Thursday, Jan. 28, 2016.
turnaround, as evidenced
(AP Photo/Jeff Chiu)
by Microsoft’s latest earn-
ings report on Thursday.
The Redmond, Washing-
ton-based tech company ing more of their operations by its rivals, Apple and The company is already
to remote data centers, Google. seeing an increase in sales
reported $5 billion in profit accessed via the Internet. The goal is to get people of apps and online adver-
Microsoft broke with tradi- using Microsoft’s latest tising, tied to new features
on nearly $24 billion in sales tion last July by releasing products, no matter what in Windows 10, Nadella told
Windows 10 as a free up- kind of device they prefer, analysts Thursday.q
for the quarter ending Dec.
31. Revenue and profit
were both down from a
Apple’s iPhone is slumping. What’s the next big thing?
BRANDON BAILEY ity iDevice to turn things quarters ahead until we alternatives for near term doesn’t view virtual reality
AP Technology Writer around. Apple said it get to the build-up around growth. as a “niche” product.
SAN FRANCISCO (AP) — wouldn’t comment on its iPhone 7 later this year,” Sales of iPads and Mac “It’s really cool and has
The bloom may be off Ap- plans beyond what its ex- said Daniel Ives of FBR Cap- computers both dipped some interesting applica-
ple’s iPhone, at least for ecutives said Tuesday. But ital Markets, in a research in the last three months of tions,” Cook added, with-
now. So now the pressure is among some analysts, note Wednesday. He sug- 2015. In an interview, Chief out elaborating. Apple also
on the iconic Silicon Valley hope springs eternal for gested the next iPhones Financial Officer Luca recently hired virtual reality
company to come up with what the next generation will “turn this ship back into Maestri said the new Apple expert Doug Bowman, a
its next big thing. of iPhones — successors to growth waters.” Watch had its strongest Virginia Tech computer sci-
On Tuesday, Apple ac- the current 6S and 6S Plus But others warn that even sales ever in the holiday ence professor, according
knowledged that it’s likely — might bring. new phones may not be quarter, but wouldn’t pro- to reports last week.
to see an uncharacteristic Tech blogs have hinted enough to spark the kind of vide numbers. Apple, meanwhile, stressed
sales decline this spring, at a thinner iPhone 7 with sales frenzy Apple experi- Maestri and other execu- this week that it’s making
amid signs of global eco- dual cameras and wireless enced after it launched the tives say they expect sales more money — nearly $5
nomic weakness and slow- earbuds — and minus the iPhone 6 and 6 Plus mod- of iPads, Macs and Apple billion last quarter — from
ing overall demand for new familiar headphone jack — els with 4.7- and 5.5-inch Watches to grow in the fu- a growing stable of on-
smartphones. That drove to be released this fall. Oth- screens in 2014. “We are ture. And the company is line services, from the App
Apple shares down more er reports suggest Apple not seeing any meaning- widely believed to be work- Store to Apple Music and
than 6.5 percent Wednes- might also go back to the ful upgrades” or significant ing on other new products. Apple Pay. The message
day, extending a months- future with a 4-inch phone new features, wrote Rosen- While an Apple car isn’t ex- seemed aimed at reassur-
long slide. — last seen in Apple’s 2013 blatt Securities analyst Jun pected for several years, ing investors who worry that
It’s almost certainly too iPhone 5S — as a compan- Zhang. “It is in our view that CEO Tim Cook may have Apple relies on the iPhone
soon to expect an Apple ion to the next generation iPhone 7 will not sell as well hinted at another prod- for two-thirds of its revenue,
Car or even some yet-to- of bigger-screen iPhones. as the iPhone 6.” uct category Wednesday, but several analysts said it
be-named, virtual real- Apple faces “a few tough Apple doesn’t have many when he told analysts he was a positive sign.q
