Microsoft reports 27% drop in Windows OEM revenue

Microsoft reports huge Windows 11 revenue drop as PC sales slump

Microsoft reported a major drop in Windows OEM and Devices revenue, with a 22% year-over-year decline in the business unit. Windows Latest reports that Windows OEM revenue fell 27%, with an expected decline “in the mid-thirties” for next quarter.

Much of this decline is due to strong sales last year, before Windows 10’s support ended. This drove sales for new PCs, leading to a drop in demand this year. While many people still use Windows 10 devices, they don’t plan to upgrade anytime soon.

While Microsoft has cited lower demand for Windows PCs, the company did not comment on why. No one mentioned rising PC prices and component costs. I guess factors like that aren’t worth mentioning when Microsoft’s AI datacenter buildout is one of the primary reasons for higher PC pricing and declining sales. Blaming themselves for declining revenue isn’t a good look for investors.

Microsoft’s declines in Windows OEM revenue highlight how hard the consumer PC industry has been hit by the AI sector. The hoarding of DRAM and other supplies for unbuilt AI datacenters has caused consumer electronics prices to skyrocket. PC sales have declined because today’s PCs offer poor value compared with the same PCs last year. High prices have made upgrades unattractive. Given Microsoft’s investments in AI, it has only itself to blame for its declining Windows OEM revenues.

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