Microsoft (NASDAQ:MSFT) is one of the largest software makers in the world and is the dominant player in the operating system market with its Windows OS. It is expected to launch the next version of Windows – Windows 8 – in the middle of 2012. Windows 8 will compete not only with Apple‘s Mac OS X and open source Linux variants in the desktop OS market, but also with Apple’s iOS and Google‘s (NASDAQ:GOOG) Android in the tablet space. According to reports, Microsoft’s Windows 8 launch may get delayed to 2013, instead of the scheduled launch around mid 2012. 
Windows 8 Launch delay could lead to further decline in Windows revenue
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Microsoft launched a developer preview of Windows 8 in September 2011, but it hasn’t launched any beta versions yet, which has led to speculation that Microsoft may delay the launch of the RTM version of Windows 8 to Q4 2012, with general availability in early 2013.
Windows 7 has sold around 500 million copies to date, but sales have slowed down considerably now, with more than 2 years since its launch. Windows sales were down nearly 2% in FY11. Windows sales in 2012 are already expected to decline significantly due to the lowered global economic outlook, cutdown in government spending and the fall in global PC shipments due to floods in Thailand. If the Windows 8 public launch gets delayed to 2013, Windows sales can be expected to show an even greater decline in 2012, which could hurt Microsoft’s stock price, as Windows accounts for nearly 25% of the total Trefis price estimate for Microsoft, and a major portion of its overall revenues.
We currently have a $32 Trefis price estimate for Microsoft, which stands nearly 25% above its current market price.Notes: