video transcript

Microsoft may be king when it comes to software, but the company is still struggling to find success in a world moving increasingly away from the personal computer. No high marks when it comes to consumers' response to Microsoft's latest products like the Surface. Ross Rubin of Reticle Research: SOUNDBITE: ROSS RUBIN, PRINCIPAL ANALYST, RETICLE RESEARCH (ENGLISH) SAYING: "I would probably give a C+ at this point. At lot of consumers and professionals are waiting for the Pro version of Surface, which will provide the backward compatibility with today's Windows applications." STAND-UP: CONWAY G. GITTENS, REUTERS REPORTER (ENGLISH) SAYING: "One thing noticeably absent from the earnings release - there were no specific sales figures on the Surface tablet, which suggests the device did not do as well as Microsoft hoped during the key Christmas season." But Microsoft is already working on extra credit to try to get that grade up. A version of the Surface using an Intel chip will hit the market in early February, which means this Surface can run all the old programs and apps on older Windows devices. And speaking of Windows: SOUNDBITE: ROSS RUBIN, PRINCIPAL ANALYST, RETICLE RESEARCH (ENGLISH) SAYING: "Windows 8. Probably a B+. I think there was a lot of skepticism regarding whether Microsoft would be able to make the case for an operating system that combined the worlds of keyboard and mouse and the world of touch screens and these bold colors and it seems like consumers are adopting it." Sales from its Windows division were up 24 percent in the fiscal second-quarter compared to the year before. So far, Windows 8 has sold over 60 million licenses. That demand boosted total revenues to $21.5 billion for the quarter and $73 billion for the year - as the operating system continues to fuel sales growth year after year after year. But once again - the transition from the big screen to the small screen has been less successful. SOUNDBITE: ROSS RUBIN, PRINCIPAL ANALYST, RETICLE RESEARCH (ENGLISH) SAYING: "Windows Phone 8. We would probably give them about a solid C at this point, still trailing very far behind Apple and Android." As a whole, the entertainment and devices division which includes the phone and the Xbox suffered a double-digit drop in revenues. Not good during the holiday season when consumer products are expected to fly out the window.