There are a few snippets from Bloomberg’s earnings expectations for key IT companies today that give us some hints about the short-term future for the PC/notebook/tablet markets. The first of these is the one for Intel;
Santa Clara, California-based Intel on Jan. 17 may report profit slumped about 29 percent to 46 cents a share, following three straight quarters of declines or no growth, as consumers buy more tablets and smartphones instead of personal computers.
This slump at Intel underlines slowing PC sales we reported on earlier. Intel will find itself in some difficulty if either their Atom-based and new Haswell processors don’t catch on. ARM processors – which power most tablets – will continue to thrive
Next Bloomberg discusses Microsoft’s expected earnings;
Microsoft Corp. (MSFT), based in Redmond, Washington, is poised to report next week that net income fell about 3 percent to $6.42 billion, based on the average estimate. The October release of a new Windows operating system and its first computer, a tablet called Surface, failed to revive the declining PC market or stanch the shift of consumers to tablets such as Apple Inc.’s iPad, said Colin Gillis, an analyst at BGC Partners LP in New York, in a note to clients.
There’s not too much new here if these projections pan out. Microsoft will make a smidgen less that the ton of cash it usually makes, Surface has not done well, and PC sales are shrinking. However, 2013 will be very different for Microsoft as Windows 8 sales rise and it becomes a force on smaller form factors.
Next is Apple, who we note, the stock market has soured on in the past few months;
Earnings may drop 3.7 percent to $13.35 a share at Apple, its first decline in about a decade. The year-earlier quarter, aided by iPhone demand, was a record for Cupertino, California- based Apple and one of the most profitable in corporate history.
There’s a couple of paradoxical things here. Apple’s iPhone sold like gangbusters over the holiday sopping period, but stock market sentiment is souring over the increasingly competitive market Apple is facing worldwide, including Android and Windows 8.
In summary then, Microsoft must understand that future growth lies in the new form factors it is seeking to enter i.e., smartphones and tablets. It can rest assured in the fact however, that the markets it dominates – Office, Windows, and Windows Server – it has both the market awareness and hard cash to win sizable market share in the new markets.[source]