Winnipeg Free Press - PRINT EDITION

PC makers' stocks take hit

New numbers on higher smartphone, tablet use hit Microsoft, HP

  • Print

SAN FRANCISCO -- If fewer people are interested in buying a new personal computer, then fewer investors want to own stakes in companies whose fortunes are tied to the sales of laptop and desktop machines.

That logic ruled Thursday as Wall Street reacted to fresh evidence PCs are turning into a dying breed of technology as consumers and businesses embrace smartphones and tablet computers as their preferred computing devices.

The stocks of PC software maker Microsoft Corp. and PC maker Hewlett-Packard Co. absorbed significant hits on the news PCs suffered an unprecedented sales decline during the first three months of the year. Other companies connected to the PC industry, such as Intel Corp., also were affected, although not to the same degree as the industry bellwethers.

Microsoft's stock fell $1.35, or 4.4 per cent, to close at $28.93, while HP's shed $1.44, or 6.5 per cent to finish at $20.88. Intel shares decreased 43 cents, or nearly two per cent, to $21.83.

First-quarter shipments of PCs plummeted by 11 per cent to 14 per cent from a year earlier, according to separate estimates issued late Wednesday by Gartner Inc. and International Data Corp.

By either measure, it was the biggest decrease recorded by either research firm since they began tracking PC sales. For IDC, the data go back to 1994 -- just before Microsoft released a revamped PC operating system called Windows 95, which played a major role in triggering a sales boom that turned laptop and desktop machines into a household staple.

Microsoft hoped to revive PC demand last year with the debut of the most dramatic makeover of Windows since the 1995 redesign. The changes imbued Windows with some of the qualities of mobile software, including touch-screen controls and a display of applications in a mosaic of interactive tiles.

Although Microsoft says it's happy with the more than 60 million copies of Windows 8 that have been sold since its October release, analysts have been disappointed.

In its report, IDC blamed Windows 8 for accelerating the sales decline by confusing too many people who had become accustomed to using the old operating system. Another problem: The PCs designed to run on Windows 8 are coming in a befuddling array of styles and are demanding significantly higher prices than older models, at a time when the initial out-of-pocket expense for a smartphone is as low as $99 and tablet computers go for less than $200. In a sign of how sensitive consumers have become to prices, Amazon.com Inc.'s top-selling laptop is a $249 Samsung laptop running a new operating system based on Google's Chrome Web browser.

Count Sterne Agee's Shaw Wu among the analysts worried about the future of Microsoft and its partners in the PC industry. "We frankly believe (Microsoft's) strategy of forcing user interface changes that nobody wants has proven to be a disaster," Wu wrote in a Thursday note.

Nomura Securities analyst Rick Sherlund also took a dimmer view of Microsoft's future prospect as he lowered his recommendation on the company's stock from a "buy" to "neutral." In a Thursday note, Sherlund asserted that about half of all consumers now see little reason to buy a PC or any other device running on Windows.

Microsoft may try to lure back consumers by offering less expensive devices. The company, which is based in Redmond, Wash., is now developing a smaller version of its Surface tablet to compete with similar-sized devices made by Apple Inc., Google Inc. and Amazon.com Inc., according to a report in the Wall Street Journal, which cited anonymous people familiar with the matter.

 

-- The Associated Press

Republished from the Winnipeg Free Press print edition April 12, 2013 B11

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

It’s the End Of the Term And They Know It, Part Two

View more like this

Photo Store Gallery

  • Marc Gallant / Winnipeg Free Press. Local- WINTER FILE. Snowboarder at Stony Mountain Ski Hill. November 14, 2006.
  • Aerial view of Portage and Main, The Esplanade Riel, Provencher Bridge over the Red River, The Canadian Museum for Human Rights and The Forks near the Assiniboine River, October 21st, 2011. (TREVOR HAGAN/WINNIPEG FREE PRESS) CMHR

View More Gallery Photos

Poll

Do you support Pimicikamak First Nation's protest against Manitoba Hydro?

View Results

View Related Story

Ads by Google