Is There Hope for this Tech Giant?
What is the Future for Windows 8?
It is still too early to tell where exactly Windows 8 will stack up on the operating system platform, but it certainly has its work cut out. Only five months after its retail release, Windows 7 was found on more than 10 percent of all Windows machines. Vista took 12 months to achieve the same status. Vista’s market share eventually peaked at 20.3 percent on all Windows computers in October 2009, while Windows 7 hit almost 50 percent at the end of October this year.
CHEAT SHEET Analysis: Do “Trends Support the Industry in which Microsoft Operates?”
One of the core components of our CHEAT SHEET Investing Framework explains that companies riding macro trends tend to outperform those which do not. Think of the investing proverb, “A rising tide raises all boats.”
Microsoft is still a tech giant with a rock solid balance sheet and reliable dividend, but the company faces huge headwinds. Popular tablets from companies such as Apple (NASDAQ:AAPL) and Amazon.com (NASDAQ:AMZN) have placed pressure on PC sales. Gartner, a leading information technology research company, announced in October that worldwide PC shipments totaled 87.5 million units in the third quarter, representing an 8.3 percent decline from a year earlier. It is the largest projected drop for the industry since at least 2001.
Additionally, Microsoft appears to be off to a slow start in its move into the tablet space. Piper Jaffray analyst Gene Munster and his team spent Black Friday at Mall of America analyzing Microsoft and Apple sales. Shoppers at the Apple store purchased an average of 11 iPads per hour. On the other hand, Microsoft did not sell one Surface tablet during the two hours that Piper Jaffray spent monitoring the outlet. Furthermore, according to a report by IBM (NYSE:IBM), the iPad generated more online traffic on Black Friday than any other tablet or smartphone, accounting for almost 10 percent of online shopping. The iPhone came in second with 8.7 percent of traffic.
Investor Insight: Apple Becomes Bigger Part of Thanksgiving Feast