Increase in Microsoft PC demand Amid Covid-19
Microsoft today released the third quarter of its financial reports for 2020 and all eyes are centered on the early effects of the current coronavirus pandemic. The corporation records $35 billion in sales, including $10.8 billion in net income. Sales are up 15 percent, net revenue has soared 22 percent, and Microsoft claims “COVID-19 has had a negligible net effect on total business revenue.”
Microsoft reports that, in the final weeks of the quarter ending 31 March, “there has been a decline in transactional licensing, especially in small and medium-sized businesses, and a decrease in advertisement expenditure in LinkedIn.” Windows has become a surprise bright spot this quarter due to increased demand for PCs.
Obviously, the pandemic has improved remote jobs, and Microsoft has gained from its cloud and Office market offerings.
“We’ve seen two years’ worth of digital transformation in two months,” said Microsoft CEO Satya Nadella. “From remote teamwork and learning to sales and customer service, to critical cloud infrastructure and security – we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything.”
Over the pandemic, there has definitely been a growing need for Windows PCs both for work-related tasks and for students seeking to learn from home. Windows OEM Pro sales rose by 5 percent as a consequence of “increased demand to help remote work and learn scenarios.” However, some of this growth in demand was balanced by production issues in China. Non-profit sales dropped 10% Since Microsoft continues to see heavy rivalry in China for lower-priced products and supply restrictions.
Microsoft’s Surface sales have only risen by 1 percent this year, possibly because no new Surface items have been released by the organization over the last year. For around six months now, Microsoft has been marketing its modified Surface Pro 7, Surface Laptop 3 and the latest Surface Pro X.
Microsoft is set to release the latest Surface Book 3 and Surface Go 2 tablets in May, although there have been rumors that also say that the firm is about to announce the Surface Buds although likely upgrade the Surface Dock as well. Microsoft hasn’t confirmed any Surface Hardware case for May yet, however, considering the pandemic, any hardware announcement would likely be online.
This time last year, Xbox and gaming were still high for Microsoft and new news indicated that game consumption since the pandemic has increased. Microsoft reports that total gaming sales increased by 1 percent this year, with games and services on Xbox increasing by just 2 percent amid improved dedication during home-stay orders.
Throughout the coming weeks, Microsoft is scheduled to further outline its ambitions for the Xbox Gen X, including the release of several titles that would be featured on the console. Last month, the firm announced the full Xbox Series X features including a 12 teraflop Cpu, 16 GB ram, and exclusive 1 TB expansion packs.
Like other sales quarters in Microsoft, real growth comes from cloud and office divisions in the business. The sales from Office Business goods and cloud services grew 13 percent, and also sales from Office Professional goods and cloud services rose 15 percent, with Office 365 user subscriptions reaching 39.6 million.
Usage of Microsoft Teams has now reached 75 million active users a day, rising 70 percent in just one month. Nadella also stated that in a single day earlier this month, Microsoft had 200 million meeting participants, a number that puts Teams closer to the 300 million average meeting participants at Zoom.
Server goods and sales from cloud providers have grown by 30% this year, year on year, and this part of Microsoft’s sales accounts for the biggest $12.3 billion slice. Productivity and market operations, like Workplace, LinkedIn, and Dynamics, have produced $11.7 billion this year, with further personal computer sales (like Screen, Floor, and Xbox) of $11 billion.
Microsoft also became a $1 trillion company around this time last year, and the company has maintained that market cap despite the ongoing pandemic. While the pandemic had little effect on today’s Q3 results, Microsoft’s guidance for Q4 still shows revenue growth for its businesses.
We love to hear from you, comment below, and share.