Microsoft (NASDAQ:MSFT) dominates the desktop operating system market under its flagship brand, Windows. It competes primarily with Apple‘s (NASDAQ:AAPL) Mac OS X and variants of the open source Linux OS. It will launch Windows 8 in 2012, and the new OS will have additional competitors like Google‘s (NASDAQ:GOOG) Android and Apple’s iOS in the tablet market.
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Apple’s Mac OS X shipments have been growing much faster than the overall market in the past couple of years while Microsoft’s Windows sales have been sluggish as Windows 7 was launched nearly 3 years ago. This quarter, it posted record Mac sales again, and now has more than 5% of the overall OS market, and a much larger portion of the overall profits. [1] We expect Apple to have a 6% share of the overall notebook market by the end of 2011, increasing steadily throughout our forecast period.
We expect Windows’ sales to pick up significantly next year after the launch of Windows 8, which will be targeted at the desktop, notebook and tablet markets. However, as Apple continues its upward march, Windows may lose market share in the desktop and notebook markets.
Tweak the chart below to see how a decrease in Windows’ global market share impacts the Trefis price estimate for Microsoft.
We have a $32 Trefis price estimate for Microsoft, which stands nearly 20% above the current market price. Windows accounts for around 25% of its total price estimate, being one of its major revenue generators.
Understand How a Company’s Products Impact its Stock Price at Trefis
Notes:- Mac platform reaches 15-year high with 5% worldwide market share, Apple Insider [↩]
