Microsoft predicts another cruel quarter for PCs

Computerworld - Microsoft last week prepped Wall Street for a 2% slip in Windows revenue for the third quarter, but warned that PC shipments will continue their double-digit tumble.

"In Windows, we expect revenues to continue to be negatively impacted by the decline in the consumer x86 PC market," said Microsoft CFO Amy Hood during an earnings call on Thursday with financial analysts. "Excluding the impact of the Windows upgrade offer in the prior year, OEM revenue should account for approximately 65% of the division's revenue and should decline mid-teens."

Because sales of Windows to OEMs like Lenovo, HP and Dell historically track closely -- although not exactly -- with the number of PCs that come off factory lines, Hood essentially revealed Microsoft's prediction for the quarter ending Sept. 30: PC shipments could decline around 15% year-over-year.

By pegging PC shipments as down "mid-teens." Hood forecast a decline three times greater than the current estimate of research firm IDC, which several weeks ago said the third quarter would be off about 5% compared to 2012.

Recently, however, IDC said it suspected that its third- and fourth-quarter estimates were too rosy. The company issues monthly updates of its quarter-by-quarter PC shipment forecasts, and will probably revise its numbers downward around the end of July.

If Hood is on target, about 75 million PCs will ship in the third quarter, down from 88.3 million in the same period last year.

That would put the year on a rough pace of about 300 million PCs, a decline of some 50 million systems compared to year before, or an annual contraction of around 14%.

But the quarter could be even worse for PCs than Hood hinted: Windows OEM sales don't always match PC shipments, sometimes lagging behind several percentage points. Some of that can be attributed to non-Windows personal computers, like Macs and Chrome OS-based notebooks, but Microsoft also regularly cites China, as Hood did last week, where a significant number of machines leave factories minus an OS. Later, resellers or customers install one -- in many cases a pirated copy of Windows that generates zero revenue for Microsoft.

Windows' revenue, on the other hand, will decline by just 1.9% year-over-year, Hood said. According to the clues she gave analysts, the Windows group will post revenue of about $3.18 billion for the quarter, off 2012's third quarter's $3.24 billion.

The substantial decline in Windows OEM sales, said Hood, would be offset by revenue generated by the Surface tablets -- which, at least for now, will continue to be reported on the Windows Division's books -- and volume licensing, including Software Assurance annuity payments from large companies.

If Hood's PC prediction comes true, it would be the sixth straight quarterly contraction by the business, set a record for the sharpest single-quarter decline, and put 2013 on pace for the largest-ever shipment drop in the nearly 20 years that researchers IDC and Gartner have tracked numbers.

Microsoft has predicted that Windows sales to OEMs will drop by 'mid-teens' in the quarter ending Sept. 30, implying a decline of approximately 15% in PC shipments for the period. The column tinted red is 'Peak PC,' the third quarter of 2011, when the largest-ever number of personal computers rolled off factory lines. (Data: IDC, Microsoft.)

This article, Microsoft predicts another cruel quarter for PCs, was originally published at Computerworld.com.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at  @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Read more about PCs in Computerworld's PCs Topic Center.

Small and midsize businesses are moving to the cloud to host their communications capabilities. Learn how enterprise-quality phone benefits, online management, conferencing, auto attendant, and ease of use are built into a system that is half the cost of a PBX.

Read now.

View the original article here

Mac sales slide for third straight quarter, fall 7%

Computerworld - Mac sales in the second quarter contracted by nearly 7%, the third consecutive quarter of decline, sliding to 3.75 million systems, the lowest number in more than two years, the company reported Tuesday.

Although the sales decline was just over half that of the PC industry average, the three straight quarters of declines -- and the fact that the two preceding them were positive by very slim margins -- confirms that Macs are being battered by the same factors as machines powered by Microsoft's Windows, including cannibalization by tablets.

According to estimates by IDC, the global personal computer business shrank by 11.4% when compared to the same quarter the year before. PC shipments have posted negative growth numbers for five consecutive quarters, and appear destined to continue that trend through at least the rest of 2013.

Apple will find it just as tough as any Windows PC maker to post gains in the near future: In the third quarter of 2012, Apple sold 4.9 million Macs, its second-best quarter ever. Matching that would take a quarter-over-quarter increase of 31%, a sequential gain nearly one-and-a-half times larger than Apple's biggest since 2006.

The company has a better shot at besting prior-year sales in the October-December quarter, largely because 2012's final three months were a disaster for the Mac, with sales plummeting 22% from the year before. Apple later blamed the fall-off in sales to problems getting new iMacs off factory lines.

Macs aren't in danger of being dumped by Apple, said Ezra Gottheil, an analyst with Technology Business Research, in a Tuesday interview. "They're still the heart of the company," he said, referring to tradition, not revenue.

But the Mac was largely ignored during Tuesday's earnings call, when CEO Tim Cook and Chief Financial Officer Peter Oppenheimer perfunctorily cited a few statistics and then moved on to other products.

That was understandable considering the Mac's place in the Apple revenue hierarchy. In the second quarter, Macs generated 14% of Apple's total revenue, slightly more than they have over the last three quarters. But the iPhone, and to a lesser extent, the iPad, are far more important to Apple's bottom line than is the Mac. The two mobile lines accounted for about 70% of the quarter's sales.

One of the few bright spots in the Mac's performance was that revenue declined less than did unit sales: Year-over-year revenue from the Mac was down only 1%. The explanation? The average selling price, or ASP, for the Mac was $1,303, or 6% higher than last year.

The ASP increase was highlighted by data from Chicago-based research company Consumer Intelligence Research Partners (CIRP). In early July, a CIRP-conducted survey of U.S. customers showed that the higher-priced Retina-equipped MacBook Pro accounted for 31% of all Mac sales from April through June. The more expensive 15-in. notebooks, which start at $2,199, made up 70% of the Retina sales, or nearly a fourth of all Macs.

The first Retina MacBook Pro did not appear until mid-June 2012, giving this year the revenue edge.

Apple also watched another metric take a dive. Combined Mac and iPad sales -- aggregated by some to analyze a company's complete computing line as buyers snap up tablets in lieu of notebooks -- were down even further than Macs alone.

Sales for Macs-plus-iPads plunged to 18.4 million from 21.1 million in the same period of 2012, a drop of 12.8%, or more than a percentage point than the personal computer industry's average decline. It was the first time since the iPad's 2010 introduction that the combined sales have fallen compared to the year before.

Combined sales of Macs and iPads plunged nearly 13% in the second quarter, the first time that metric has gone negative since the tablet's 2010 introduction. (Data: Apple.)

This article, Mac sales slide third straight quarter, fall 7%, was originally published at Computerworld.com.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Read more about Macintosh in Computerworld's Macintosh Topic Center.

Small and midsize businesses are moving to the cloud to host their communications capabilities. Learn how enterprise-quality phone benefits, online management, conferencing, auto attendant, and ease of use are built into a system that is half the cost of a PBX.

Read now.

View the original article here

Mac sales slide for third straight quarter, fall 7%

Computerworld - Mac sales in the second quarter contracted by nearly 7%, the third consecutive quarter of decline, sliding to 3.75 million systems, the lowest number in more than two years, the company reported Tuesday.

Although the sales decline was just over half that of the PC industry average, the three straight quarters of declines -- and the fact that the two preceding them were positive by very slim margins -- confirms that Macs are being battered by the same factors as machines powered by Microsoft's Windows, including cannibalization by tablets.

According to estimates by IDC, the global personal computer business shrank by 11.4% when compared to the same quarter the year before. PC shipments have posted negative growth numbers for five consecutive quarters, and appear destined to continue that trend through at least the rest of 2013.

Apple will find it just as tough as any Windows PC maker to post gains in the near future: In the third quarter of 2012, Apple sold 4.9 million Macs, its second-best quarter ever. Matching that would take a quarter-over-quarter increase of 31%, a sequential gain nearly one-and-a-half times larger than Apple's biggest since 2006.

The company has a better shot at besting prior-year sales in the October-December quarter, largely because 2012's final three months were a disaster for the Mac, with sales plummeting 22% from the year before. Apple later blamed the fall-off in sales to problems getting new iMacs off factory lines.

Macs aren't in danger of being dumped by Apple, said Ezra Gottheil, an analyst with Technology Business Research, in a Tuesday interview. "They're still the heart of the company," he said, referring to tradition, not revenue.

But the Mac was largely ignored during Tuesday's earnings call, when CEO Tim Cook and Chief Financial Officer Peter Oppenheimer perfunctorily cited a few statistics and then moved on to other products.

That was understandable considering the Mac's place in the Apple revenue hierarchy. In the second quarter, Macs generated 14% of Apple's total revenue, slightly more than they have over the last three quarters. But the iPhone, and to a lesser extent, the iPad, are far more important to Apple's bottom line than is the Mac. The two mobile lines accounted for about 70% of the quarter's sales.

One of the few bright spots in the Mac's performance was that revenue declined less than did unit sales: Year-over-year revenue from the Mac was down only 1%. The explanation? The average selling price, or ASP, for the Mac was $1,303, or 6% higher than last year.

The ASP increase was highlighted by data from Chicago-based research company Consumer Intelligence Research Partners (CIRP). In early July, a CIRP-conducted survey of U.S. customers showed that the higher-priced Retina-equipped MacBook Pro accounted for 31% of all Mac sales from April through June. The more expensive 15-in. notebooks, which start at $2,199, made up 70% of the Retina sales, or nearly a fourth of all Macs.

The first Retina MacBook Pro did not appear until mid-June 2012, giving this year the revenue edge.

Apple also watched another metric take a dive. Combined Mac and iPad sales -- aggregated by some to analyze a company's complete computing line as buyers snap up tablets in lieu of notebooks -- were down even further than Macs alone.

Sales for Macs-plus-iPads plunged to 18.4 million from 21.1 million in the same period of 2012, a drop of 12.8%, or more than a percentage point than the personal computer industry's average decline. It was the first time since the iPad's 2010 introduction that the combined sales have fallen compared to the year before.

Combined sales of Macs and iPads plunged nearly 13% in the second quarter, the first time that metric has gone negative since the tablet's 2010 introduction. (Data: Apple.)

This article, Mac sales slide third straight quarter, fall 7%, was originally published at Computerworld.com.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Read more about Macintosh in Computerworld's Macintosh Topic Center.

Small and midsize businesses are moving to the cloud to host their communications capabilities. Learn how enterprise-quality phone benefits, online management, conferencing, auto attendant, and ease of use are built into a system that is half the cost of a PBX.

Read now.

View the original article here

Mac sales slide for third straight quarter, fall 7%

Computerworld - Mac sales in the second quarter contracted by nearly 7%, the third consecutive quarter of decline, sliding to 3.75 million systems, the lowest number in more than two years, the company reported Tuesday.

Although the sales decline was just over half that of the PC industry average, the three straight quarters of declines -- and the fact that the two preceding them were positive by very slim margins -- confirms that Macs are being battered by the same factors as machines powered by Microsoft's Windows, including cannibalization by tablets.

According to estimates by IDC, the global personal computer business shrank by 11.4% when compared to the same quarter the year before. PC shipments have posted negative growth numbers for five consecutive quarters, and appear destined to continue that trend through at least the rest of 2013.

Apple will find it just as tough as any Windows PC maker to post gains in the near future: In the third quarter of 2012, Apple sold 4.9 million Macs, its second-best quarter ever. Matching that would take a quarter-over-quarter increase of 31%, a sequential gain nearly one-and-a-half times larger than Apple's biggest since 2006.

The company has a better shot at besting prior-year sales in the October-December quarter, largely because 2012's final three months were a disaster for the Mac, with sales plummeting 22% from the year before. Apple later blamed the fall-off in sales to problems getting new iMacs off factory lines.

Macs aren't in danger of being dumped by Apple, said Ezra Gottheil, an analyst with Technology Business Research, in a Tuesday interview. "They're still the heart of the company," he said, referring to tradition, not revenue.

But the Mac was largely ignored during Tuesday's earnings call, when CEO Tim Cook and Chief Financial Officer Peter Oppenheimer perfunctorily cited a few statistics and then moved on to other products.

That was understandable considering the Mac's place in the Apple revenue hierarchy. In the second quarter, Macs generated 14% of Apple's total revenue, slightly more than they have over the last three quarters. But the iPhone, and to a lesser extent, the iPad, are far more important to Apple's bottom line than is the Mac. The two mobile lines accounted for about 70% of the quarter's sales.

One of the few bright spots in the Mac's performance was that revenue declined less than did unit sales: Year-over-year revenue from the Mac was down only 1%. The explanation? The average selling price, or ASP, for the Mac was $1,303, or 6% higher than last year.

The ASP increase was highlighted by data from Chicago-based research company Consumer Intelligence Research Partners (CIRP). In early July, a CIRP-conducted survey of U.S. customers showed that the higher-priced Retina-equipped MacBook Pro accounted for 31% of all Mac sales from April through June. The more expensive 15-in. notebooks, which start at $2,199, made up 70% of the Retina sales, or nearly a fourth of all Macs.

The first Retina MacBook Pro did not appear until mid-June 2012, giving this year the revenue edge.

Apple also watched another metric take a dive. Combined Mac and iPad sales -- aggregated by some to analyze a company's complete computing line as buyers snap up tablets in lieu of notebooks -- were down even further than Macs alone.

Sales for Macs-plus-iPads plunged to 18.4 million from 21.1 million in the same period of 2012, a drop of 12.8%, or more than a percentage point than the personal computer industry's average decline. It was the first time since the iPad's 2010 introduction that the combined sales have fallen compared to the year before.

Combined sales of Macs and iPads plunged nearly 13% in the second quarter, the first time that metric has gone negative since the tablet's 2010 introduction. (Data: Apple.)

This article, Mac sales slide third straight quarter, fall 7%, was originally published at Computerworld.com.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Read more about Macintosh in Computerworld's Macintosh Topic Center.

Small and midsize businesses are moving to the cloud to host their communications capabilities. Learn how enterprise-quality phone benefits, online management, conferencing, auto attendant, and ease of use are built into a system that is half the cost of a PBX.

Read now.

View the original article here

Microsoft predicts another cruel quarter for PCs

Computerworld - Microsoft last week prepped Wall Street for a 2% slip in Windows revenue for the third quarter, but warned that PC shipments will continue their double-digit tumble.

"In Windows, we expect revenues to continue to be negatively impacted by the decline in the consumer x86 PC market," said Microsoft CFO Amy Hood during an earnings call on Thursday with financial analysts. "Excluding the impact of the Windows upgrade offer in the prior year, OEM revenue should account for approximately 65% of the division's revenue and should decline mid-teens."

Because sales of Windows to OEMs like Lenovo, HP and Dell historically track closely -- although not exactly -- with the number of PCs that come off factory lines, Hood essentially revealed Microsoft's prediction for the quarter ending Sept. 30: PC shipments could decline around 15% year-over-year.

By pegging PC shipments as down "mid-teens." Hood forecast a decline three times greater than the current estimate of research firm IDC, which several weeks ago said the third quarter would be off about 5% compared to 2012.

Recently, however, IDC said it suspected that its third- and fourth-quarter estimates were too rosy. The company issues monthly updates of its quarter-by-quarter PC shipment forecasts, and will probably revise its numbers downward around the end of July.

If Hood is on target, about 75 million PCs will ship in the third quarter, down from 88.3 million in the same period last year.

That would put the year on a rough pace of about 300 million PCs, a decline of some 50 million systems compared to year before, or an annual contraction of around 14%.

But the quarter could be even worse for PCs than Hood hinted: Windows OEM sales don't always match PC shipments, sometimes lagging behind several percentage points. Some of that can be attributed to non-Windows personal computers, like Macs and Chrome OS-based notebooks, but Microsoft also regularly cites China, as Hood did last week, where a significant number of machines leave factories minus an OS. Later, resellers or customers install one -- in many cases a pirated copy of Windows that generates zero revenue for Microsoft.

Windows' revenue, on the other hand, will decline by just 1.9% year-over-year, Hood said. According to the clues she gave analysts, the Windows group will post revenue of about $3.18 billion for the quarter, off 2012's third quarter's $3.24 billion.

The substantial decline in Windows OEM sales, said Hood, would be offset by revenue generated by the Surface tablets -- which, at least for now, will continue to be reported on the Windows Division's books -- and volume licensing, including Software Assurance annuity payments from large companies.

If Hood's PC prediction comes true, it would be the sixth straight quarterly contraction by the business, set a record for the sharpest single-quarter decline, and put 2013 on pace for the largest-ever shipment drop in the nearly 20 years that researchers IDC and Gartner have tracked numbers.

Microsoft has predicted that Windows sales to OEMs will drop by 'mid-teens' in the quarter ending Sept. 30, implying a decline of approximately 15% in PC shipments for the period. The column tinted red is 'Peak PC,' the third quarter of 2011, when the largest-ever number of personal computers rolled off factory lines. (Data: IDC, Microsoft.)

This article, Microsoft predicts another cruel quarter for PCs, was originally published at Computerworld.com.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at  @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Read more about PCs in Computerworld's PCs Topic Center.

Small and midsize businesses are moving to the cloud to host their communications capabilities. Learn how enterprise-quality phone benefits, online management, conferencing, auto attendant, and ease of use are built into a system that is half the cost of a PBX.

Read now.

View the original article here

Microsoft predicts another cruel quarter for PCs

Computerworld - Microsoft last week prepped Wall Street for a 2% slip in Windows revenue for the third quarter, but warned that PC shipments will continue their double-digit tumble.

"In Windows, we expect revenues to continue to be negatively impacted by the decline in the consumer x86 PC market," said Microsoft CFO Amy Hood during an earnings call on Thursday with financial analysts. "Excluding the impact of the Windows upgrade offer in the prior year, OEM revenue should account for approximately 65% of the division's revenue and should decline mid-teens."

Because sales of Windows to OEMs like Lenovo, HP and Dell historically track closely -- although not exactly -- with the number of PCs that come off factory lines, Hood essentially revealed Microsoft's prediction for the quarter ending Sept. 30: PC shipments could decline around 15% year-over-year.

By pegging PC shipments as down "mid-teens." Hood forecast a decline three times greater than the current estimate of research firm IDC, which several weeks ago said the third quarter would be off about 5% compared to 2012.

Recently, however, IDC said it suspected that its third- and fourth-quarter estimates were too rosy. The company issues monthly updates of its quarter-by-quarter PC shipment forecasts, and will probably revise its numbers downward around the end of July.

If Hood is on target, about 75 million PCs will ship in the third quarter, down from 88.3 million in the same period last year.

That would put the year on a rough pace of about 300 million PCs, a decline of some 50 million systems compared to year before, or an annual contraction of around 14%.

But the quarter could be even worse for PCs than Hood hinted: Windows OEM sales don't always match PC shipments, sometimes lagging behind several percentage points. Some of that can be attributed to non-Windows personal computers, like Macs and Chrome OS-based notebooks, but Microsoft also regularly cites China, as Hood did last week, where a significant number of machines leave factories minus an OS. Later, resellers or customers install one -- in many cases a pirated copy of Windows that generates zero revenue for Microsoft.

Windows' revenue, on the other hand, will decline by just 1.9% year-over-year, Hood said. According to the clues she gave analysts, the Windows group will post revenue of about $3.18 billion for the quarter, off 2012's third quarter's $3.24 billion.

The substantial decline in Windows OEM sales, said Hood, would be offset by revenue generated by the Surface tablets -- which, at least for now, will continue to be reported on the Windows Division's books -- and volume licensing, including Software Assurance annuity payments from large companies.

If Hood's PC prediction comes true, it would be the sixth straight quarterly contraction by the business, set a record for the sharpest single-quarter decline, and put 2013 on pace for the largest-ever shipment drop in the nearly 20 years that researchers IDC and Gartner have tracked numbers.

Microsoft has predicted that Windows sales to OEMs will drop by 'mid-teens' in the quarter ending Sept. 30, implying a decline of approximately 15% in PC shipments for the period. The column tinted red is 'Peak PC,' the third quarter of 2011, when the largest-ever number of personal computers rolled off factory lines. (Data: IDC, Microsoft.)

This article, Microsoft predicts another cruel quarter for PCs, was originally published at Computerworld.com.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at  @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Read more about PCs in Computerworld's PCs Topic Center.

Small and midsize businesses are moving to the cloud to host their communications capabilities. Learn how enterprise-quality phone benefits, online management, conferencing, auto attendant, and ease of use are built into a system that is half the cost of a PBX.

Read now.

View the original article here