Windows sales drop nearly a quarter

Microsoft's Client group saw revenues tumble 24 per cent

Microsoft has posted revenue of $4.03bn from all desktop versions of Windows for the three months ending 31 March, down from $5.3bn during the same period 12 months earlier.

The company's Client group, home to various editions of the Windows client operating systems, saw revenues tumble 24 per cent and operating income drop by 26 per cent to $3.1bn.

Microsoft attributed the fall to $1.2bn in previously deferred revenue recognised in last year's third quarter from its Express Upgrade to Windows Vista Technology Guarantee programme.

Meanwhile, the Microsoft Business Division, which sells Microsoft Office, saw a two per cent decline in revenues to $4.75bn.

Microsoft's disappointing Windows sales fly in the face of positive overall trends in the PC market which, according to the company's own estimates, grew by eight to 10 per cent.

Xbox sales offered the company some rare cause for optimism. The unit clocked up a third straight quarterly profit putting the company just one quarter short of posting its first annual profit for its games console business.

Healthy sales of Xbox 360, Halo 3, Xbox Live fees and Xbox accessories helped the division post profits of $89m for the three months ending in March.