PC Shipments Impacted by Thailand Floods to Hurt Microsoft’s Windows Sales in Q4

-0.58%
Downside
421
Market
419
Trefis
MSFT: Microsoft logo
MSFT
Microsoft

Microsoft (NASDAQ:MSFT) is the largest consumer software maker – it completely dominates the PC operating system market with the Windows OS which competes with Apple‘s (NASDAQ:AAPL) Mac OS X and variants of the open source Linux OS. Windows is one of Microsoft’s main revenue engines, and accounts for around 25% of its Trefis price estimate.

Check out our complete analysis of Microsoft.

Floods in Thailand to Hurt PC Shipments and Windows Sales

Relevant Articles
  1. Up Nearly 70% Since The Beginning Of 2023, Where Is Microsoft Stock Headed?
  2. Up 63% Since The Beginning Of 2023, How Will Microsoft Stock Trend After Q2 Earnings?
  3. Microsoft Stock Is Up 45% YTD And Outperformed The Consensus In Q1
  4. Microsoft Stock Outperformed The Expectations In Q4
  5. Microsoft Stock Is Fairly Priced At The Current Levels
  6. What To Expect From Microsoft Stock In Q3?

The recent floods in Thailand have hurt the production of hard drives by companies like Western Digital and Toshiba, leading to a jump in disk drive prices. According to a report by IDC, this could lead to a decline of around 3% in PC and notebook shipments this quarter, instead of around 5% growth in shipments owing to the holiday season. [1]

Growth in PC shipments have already been under pressure due to the weak economy and the rising popularity of tablets, which are an alternative to notebooks. The slump in PC shipments is expected to continue in the first half of 2012.

Microsoft will be launching Windows 8, the next version of Windows, by the end of the second quarter of 2012. Windows 7 has had excellent sales – around 500 million licenses to date, but they have slowed down considerably as the OS turned more than 2 years old last month.

You can tweak these graphs to see how a decrease in global PC or notebook shipments could affect Microsoft’s Trefis price estimate.

We currently have a $32 Trefis price estimate for Microsoft, which stands nearly 25% above its current market price.

Understand How a Company’s Products Impact its Stock Price at Trefis

Notes:
  1. Microsoft, Computer Makers May Be Hurt as Floods Crimp Sales, IDC Says, Bloomberg []