Microsoft Feeling PC Strain: Analyst
NEW YORK (TheStreet) -- The PC market is weak, that's not a secret. It's a shock just how weak it actually is, as tablets continue to dominate consumers mindsets, and wallets. The lackluster performance of Windows 8 is one of the major reasons why.
Trends are so bad in the PC space, Goldman Sachs analyst Heather Bellini downgraded Microsoft
There is one caveat, however, with Microsoft being able to explore "Plan B" options to boost shareholder value. These options include a breakup of the company (low probability), leveraging the balance sheet (low to medium), cutting prices to reignite growth (medium to high), or reducing expenses (low to medium).
Research firm IDC notes that, in the firstquarter of 2013, PC shipments fell 13.9% year-over-year to 76.3 million units, sharply worse than the 7.7% IDC forecast. This is the worst contraction since IDC started keeping data, and it's mostly due to tablets and smartphones taking over, and businesses not believing in Microsoft's
It's worth noting that Gartner, another research firm, sees something entirely different for Apple, growing 7.5% year-over-year to 1.65 million units. Despite this discrepancy, the overall trend from both Gartner and IDC is clear. Tablets are dominating the PC, and that trend isn't stopping anytime soon.
This PC shipment news doesn't take iPad sales into account. It's clear that iPads and other tablets are heavily affecting PC sales, and Apple, with its first mover advantage in the tablet space, is enjoying the benefits.