Microsoft admitted on Monday that initial sales of Windows Phone 7 had been lower than the company anticipated.
Microsoft CEO Steve Ballmer previously admitted that sales had been “very small” during his keynote address at the Worldwide Partner Conference earlier this year. “We’ve gone from very small to very small but its been a heck of a year,” admitted Ballmer. “A year ago, Microsoft had no Windows Phone. In the last year we’ve sold millions of phones.” However, Ballmer stopped short at saying that the sales had not met company targets.
Microsoft’s proxy statement to the U.S. securities and exchange commission on Monday reveals that initial sales of Windows Phone 7 devices were a factor in Ballmer’s bonus for 2011:
“Appraisal and other relevant information considered by the independent members of the Board, including: Mr. Ballmer’s performance against his individual commitments; the operating income performance of the Company relative to 25 large technology companies (a group that includes most of our Technology Peers); successful product launches including Kinect for Xbox and Office 365, enhancements to Windows Azure and Bing; continued progress positioning the company as a leader in the cloud and cloud-based infrastructure; key partnerships with Facebook and Nokia; significant progress in development of the next generation of Windows; work toward the successful acquisition of Skype; lower than expected initial sales of Windows Phone 7; the 2% decline in revenue for the Windows and Windows Live Division; the need for further progress in new form factors; and an overall strong financial year in which Microsoft reported record revenue of $69.9 billion, record operating income of $27.1 billion, and record earnings per share of $2.69 representing 12%, 13%, and 28% growth, respectively.”
Ballmer picked up 100% bonus, out of a possible 200%, and a pay rise of 2%. Despite the admission, it’s not all doom and gloom for Windows Phone. Microsoft recently released its Windows Phone 7.5 update for existing devices. The company revealed on Monday that it is now available for 50% of devices and all devices are expected to receive the update by the end of October. Nokia is also expected to unveil several Windows Phone devices at its Nokia World event in London later this month. Microsoft’s Windows Phone 7.5 update is sturdy upgrade that brings the platform on par with its competition. With 30,000 apps in the bank, and the focus on developers, Microsoft will be hoping that its “Mangofied” apps really start to take off shortly.