Windows sales disappoint despite Microsoft success

Microsoft saw Windows sales disappoint for the third straight quarter, taking the gloss off better-than-expected revenues.

"All eyes are on Windows and how they are ultimately going to extend this franchise henceforth, as the PC business continues to lose share to the tablets," said Josh Olson, research analyst at money manager Edward Jones.

The tablet market in earnest then

Microsoft is expected to enter the tablet market in earnest then and there year with the launch of its straightway operating system - codenamed Windows 8 - which will be compatible with the low-power chips designed by ARM Holdings favoured by tablet and mobile phone makers.

Despite the Windows dip, Microsoft managed to ease past Wall Street's revenues estimates, helped by strong sales of its Office software and Xbox game console, as so then as a dramatic drop in its tax bill.

The world's largest software maker follows Google

The world's largest software maker follows Google, Apple and IBM in reporting surprisingly good results as innovation spending holds up relatively then in an uncertain economy.

Microsoft was helped by an unusually low tax rate of seven per cent in the quarter, which cut its tax bill by more than $1 billion from the year earlier, to $445 million. The company, which gets most of its revenue from overseas, said the savings were due to a one-time tax gain and more business flowing through its regional centers in the low-tax jurisdictions of Ireland, Singapore and Puerto Rico.

Sales rose eight per cent to $17.37 billion, ahead of analysts' average estimate of $17.23 billion, boosted chiefly by sales of Office, Xbox and server software behind Microsoft's push into cloud computing.

Spending by businesses on research has as a rule outstripped cash-strapped consumers since the worldwide economic downturn.

Microsoft's business division, which last month rolled out online versions of its popular Office suite of programs just as Outlook, SharePoint and Excel, was the company's biggest seller in the quarter, racking up a seven per cent increase in sales to $5.8 billion.