Hundreds of Trefis members have created forecasts for two key drivers of Microsoft’s (NASDAQ:MSFT) stock over the last week: (1) Windows Pricing for PC Makers, (2) Windows Market Share of PCs. Their forecasts suggest that pricing for Microsoft’s Windows will decline faster than expected and that Windows will lose market share. These projections may bode well for Microsoft competitors Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG).
Microsoft’s Windows Operating System business constitutes 34% of the $32 Trefis price estimate for Microsoft’s stock. In comparison, Microsoft Office is 31%, Bing about 4%, and Xbox / Zune less than 3% of the Trefis estimate for Microsoft’s stock.
Considering the importance of the Windows business, Microsoft’s stock is quite sensitive to both 1) Windows Pricing for PC Makers and 2) Windows Market Share of PCs. Below are the charts showing recent estimates created by Trefis members for the two drivers.
1. Windows Market Share of PCs
The average of forecasts for Windows Market Share of PCs created by Trefis members, was a projected drop from 73% in 2010 to 72% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 75% in 2010 to 76% by the end of the Trefis forecast period. The member estimates imply a downside of about 1% to the Trefis price estimate for Microsoft’s stock. In the past, Windows Market Share of PCs has dropped from 76% in 2005 to 74% in 2009.
You can drag the Windows Market Share of PCs forecast trend-line above to express your own view, and see the sensitivity of Microsoft’s stock to Windows Market Share of PCs.
Our complete analysis for Windows Market Share of PCs is here.
2. Windows Pricing for PC Makers
The average of forecast for Windows Pricing for PC Makers created by Trefis members, was a projected decrease from nearly $63 in 2010 to about $58 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of a decrease from $63 in 2010 to $56 by the end of the Trefis forecast period. The member estimates imply an upside of about 1% to the Trefis price estimate for Microsoft’s stock. In the past, Windows Pricing for PC Makers has increased from $61 in 2005 to $64 in 2009.
You can drag the Windows Pricing for PC Makers forecast trend-line above to express your own view, and see the sensitivity of Microsoft’s stock to Windows Pricing for PC Makers.
Our complete analysis and model for Microsoft’s stock is here.
