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Highs and lows for Microsoft in 2013

Highs and lows for Microsoft in 2013
The good, the bad and the Windows 8
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Sometimes Microsoft can't win for losing, and sometimes it sells 2 million Xbox Ones in just 18 days. 2013 has been the usual mixed bag for Microsoft, with some clear wins – Xbox One, Office 2013, even Windows Phone sales climbing to a respectable level around the world – slightly tarnished by speculation about who will replace Steve Ballmer as CEO, suspicion about how much Microsoft knew about NSA surveillance and some strange marketing choices.

IE 11, Windows 8.1 and Surface 2 are clear improvements on last year's products and despite slipping PC sales it's been an undeniably strong year for Microsoft, but it hasn't been all good news. No sooner did it hit 250 million users and get fully integrated into Windows 8.1 than SkyDrive lost its name, thanks to the High Court deciding that Sky customers couldn't tell the difference. If you look at the other high and low-lights from a busy year, a theme starts to emerge

Microsoft's Highs

1. Record revenue, strong share price

The continuing speculation over who will replace Steve Ballmer as CEO (after his surprise announcement that he's leaving before next summer) hasn't hurt Microsoft's share price (although a lot of the increase is down to the way Microsoft is raising money by selling bonds that let it bring overseas profits back to the US). Quarterly profits were up 16% in October, as was revenue which hit a record $18.5 billion. That took the share price over $35 and it's continued to rise, peaking at $38; the last time Microsoft stock looked this good was October 2007.

2. Office 2013 and Office 365 success

Android KitKat users get QuickOffice free, Mac and iOS users get iWorks but 2 million people are shelling out the monthly subscription for the Office 365 Home Premium bundle of Office 2013, Skype minutes and 20GB SkyDrive storage. That's in addition to the $1.5 billion revenue Office 365 gets from business users (and another $1 billion for Lync). The $4.4 billion revenue for the Windows division is still higher, but slowing PC sales aren't slowing Office down.

3. Xbox One

Xbox One

X marks the Xbox One

Sony might quibble about whether it's selling more or just started selling PS4 earlier, but despite the backlash about Microsoft's plans to let you play games without the DVD as long as you were connected to the Internet (exacerbated by an employee making offhand comments on Twitter) and subsequent backdown over those plans, Xbox One is a clear success – selling a record-breaking 111,111 units a day and clocking up 83 million hours of entertainment since November. Xbox One is Microsoft's play to be the entertainment hub of the living room, with streaming video, TV integration, big-screen Skype, split-screen apps and voice control courtesy of the new Kinect, so this is more than just competing with PlayStation for hard-core gamers.

4. Patent wins in court

It's been a good year for Microsoft in court, especially against Motorola. Microsoft has won injunctions against Android phones for patent infringement and had Motorola's enormous Wi-Fi royalty claim declared "excessive".

Of course getting those judgements enforced isn't always easy; Google talked customs into allowing shipments of phones that were supposed to be banned from the US market and Microsoft went back to court - winning an appeal but not getting an answer from US Customs. The only really bad patent news was a German court striking down the FAT patent. The same court has done that before, only to have a higher court reinstate it, which might happen again and Microsoft asserts plenty of other patents it says Android infringes, so this is unlikely to affect any of the licences Android OEMs have signed with Microsoft. Of course, Google isn't going to have its Motorola handset division sign a licence any time soon.

5. Windows Phone; getting sales, apps and updates


Mary (Twitter, Google+, website) started her career at Future Publishing, saw the AOL meltdown first hand the first time around when she ran the AOL UK computing channel, and she's been a freelance tech writer for over a decade. She's used every version of Windows and Office released, and every smartphone too, but she's still looking for the perfect tablet. Yes, she really does have USB earrings.