With Weak Windows 8 Adoption, Microsoft Sales Fall Short

Jul 18, 2013

Microsoft sales and profit rose less than analysts expected in the most recent quarter as the company continues to struggle with slow adoption of its latest operating system.

Microsoft launched Windows 8 last year, but it was a radical makeover and sales have been disappointing. The company also rolled out its own tablet to compete with Apple’s iPad but that hasn’t sold well and Microsoft wrote off almost a billion dollars in the recent quarter related to tablet inventory. 

Morningstar analyst Norman Young says the company struggled to sell the Surface partly because people were unfamiliar with it.

"It wasn't available in a lot of outlets, people were still trying to get used to the idea of Microsoft  actually building computer hardware devices," Young said. "There were a variety of factors at play here."

Young says Microsoft also lags behind competitors in the realm of cloud computing. Overall, he says the company faces a lot of challenges.

"They’re trying to change the corporate culture, they’re a little bit behind on a couple of product segments and they’re trying to do this all at the same time," Young said. 

Microsoft is coming out with a new version of its Windows 8 operating system later this year to address complaints from users. That gives him reason for optimism because Young says that shows the company is listening.