Microsoft has reported a dip in quarterly sales of its core Windows operating system but sold more of its Office suite of applications and Xbox game systems.
For the first time in 20 years, Microsoft’s quarterly profit fell below that of Apple.
The world’s largest software company has been hurt by a downturn in sales of personal computers with the increasing popularity of Apple’s iPad tablet computer.
Microsoft has sold a record-breaking 350 million licenses for its Windows 7 operating system since launching it 18 months ago, but demand appears to be waning in an uncertain economy.
PC sales — which have powered Microsoft’s financial success — fell one percent in the first three months of the year, according to one research firm.
Microsoft’s shares fell further – they are down 14 percent over the past 12 months, compared with a 16 percent gain in the technology heavy Nasdaq index.
Microsoft reported a 31 percent increase in its fiscal third-quarter net profit at $5.2 billion (3.5 billion euros).
Sales at its Windows unit fell four percent; there was a 21 percent increase at the Office unit as people continued to buy copies of the new Office 2010, released last year. The entertainment and devices unit — which makes the Xbox and phone software — posted a 60 percent increase in sales.