Second quarter results from technology bellwether Microsoft dashed hopes of a swift economic recovery as the software giant warned of further weakness in its largest markets. Nevertheless, the US behemoth reported record revenues of $7.7 billion, up 18% from the year-ago quarter, thanks to strong sales of the recently-launched Xbox games console and the Windows XP operating system. Microsoft is adamant that XP has become the fastest-selling version of the Windows series, notching up sales of 17 million copies since its October 2001 release, despite initial fears of an unenthusiastic reception.
Headline figures masked a surprising trend. Channel revenues, while rising sharply in the US thanks to the Xbox, actually fell in Europe. The company said that this was due to the introduction of new licensing agreements in Europe, which will defer revenue for future quarters.