Windows 8 Threatens to Torpedo Symantec’s Norton Antivirus Business

The Norton antivirus software makes up around one-third of Symantec’s (NASDAQ:SYMC) stock value by our analysis. Symantec’s consumer antivirus market share has declined from 56% to 45% in the past five years due to Norton’s high resource requirements slowing down PC performance as well as competition from McAfee, Trend Micro and AVG. Symantec is now facing new competition from Microsoft’s (NASDAQ:MSFT) Windows 8 that boasts of providing comprehensive security features and poses a challenge to the consumer antivirus market as a whole. ^[1] Meanwhile, Symantec is trying to expand its sales by launching new products offering protection for multiple platforms – PCs, tablets and smartphones – as a way to shield its market share from falling further.

While we estimate that Symantec’s market share in consumer antivirus and security software market will decrease 45% in 2012 to 42% by the end of our forecast period, Trefis members expect an increase from 52% in 2012 to 58% during the same period. The member estimates imply an upside of 12% to the Trefis price estimate for Symantec’s stock.

See our complete analysis for Symantec’s stock is here.

Symantec’s Competition Now Includes Windows 8

Although Symantec’s Norton antivirus is powerful, it’s notorious for using a great deal of PC resources thereby slowing down PC performance. This is where competitors’ products have stepped in by filling in the demand for faster scanning while consuming less PC resources.

This competitive space, however, is set to alter with the entry of Windows 8. Microsoft will be providing additional security features for its Windows Defender software offering full protection against all sorts of malware and spyware. In the words of PCmag analyst Michael Muchmore the new Windows Defender “obviates the need for an antivirus program.” ^[1] If the claim by the analyst is indeed true, this may lead to a structural change in the consumer antivirus market and may severely impact Symantec’s market share in the future.

Symantec Launches “Norton One”

Symantec in meanwhile trying to plug the continuous decline in its consumer antivirus market share by launching new products. It recently announced the launch of “Norton One” in early 2012, and this new service will work with all major operating systems and support a wide range of platforms including PCs, tablets and smartphones. (See Symantec to Launch Norton One: Universal Protection For All Your Devices) This is part of the company “Norton Everywhere” initiative to make the digital landscape secure across devices and platforms.

We currently have a Trefis price estimate of $20.35 for Symantec’s stock, about 25% above the current market price.

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1. Will Windows 8 Destroy the Consumer Antivirus Market, PCmag, Sept 16, 2011 [↩] [↩]