Microsoft OEM Revenue Drops 7% in FY14 Q1

Oct. 30, 2013
Company Says $102 million Increase in Windows Phone Revenue Is Responsible for Decline in Other Segments

Last week Microsoft announced its FY14 Q1 results with rather depressing numbers in its Devices & Consumer Licensing segment.

D&C Licensing revenue decreased $335 million or 7% due to lower revenue from Windows OEM and Consumer Office licenses, according to Microsoft. The D&C Licensing segment includes Windows OEM licensing, Office for consumers licensing and Windows Phone licensing.

Miscrosoft said the decline was offset in part by increased Windows Phone revenue, which increased by $102 million from patent licensing.

A number of market trends have impacted revenue, including Windows OEM revenue, Windows OEM Pro revenue (up 6%), Windows OEM non-Pro revenue (down 22%) and non-Pro revenue declined 17% (excluding China).

Microsoft says the shift was expected in this segment due to steady increase in mobile device adoption by consumers globally.

In efforts to boost market share in mobile devices, Microsoft is acquiring Nokia with the intent that new revenue would partially offset the growing Windows Phone revenue in future quarters.

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