Microsoft's financial numbers for the quarter that ended September 30 revealed that the company took a hit with revenues from its Windows Phone division, as it recorded a 46 percent decrease compared to a year ago. The numbers may come as a surprise as Microsoft experienced "modest growth" in Windows Phone sales for the same quarter.
In its presentation, Microsoft said, "IP licensing revenue decrease due primarily to higher mix of low royalty devices." It's also important to note that Microsoft decided to give OEMs a free license to use Windows on devices that were smaller than nine inches in order to encourage more companies to join the Windows Phone hardware ecosystem.
Microsoft also stated that OEM revenues from the regular PC version of Windows were down two percent for the quarter. Non-Pro revenues were down one percent with Microsoft saying it saw "positive licensing growth as new licensing programs help partners bring new opening price point devices to market." That's likely a reference to Windows 8.1 with Bing, which is being offered to OEMs at a lower cost. It is the same version of Windows 8.1 everyone else uses, except the search engine is set to Bing by default. Users who buy a PC with Windows 8.1 with Bing are free to change that default setting.
Windows OEM Pro revenue was down four percent, with Microsoft saying that is "generally in line with normal business PC replacement cycles."