Microsoft Has Rough Start In 2012 With Slow Computer Sales

For Microsoft, 2012 is expected to be a very hectic year, since the company is trying to get a better grip of its position in the markets. But, if Xbox sales are boosting, Microsoft is challenged by a very poor performance in the computer market. The company has a rough start in 2012 as slow computer sales dramatically affect  profits.

Although the overall IT business is thriving at a time when other major fields are still having a hard time, the PC market is plummeting and it isn’t only Microsoft that’s suffering. The end of 2011 has marked the start for an obvious drop in sales on the PC market, as devices such as smartphones, tablets and laptops are taking the users’ focus away from computers.

At the same time, Microsoft and its peers have been seriously impaired by the floods in Thailand which have disrupted the disk-drive output and shipments. As a result, for at least the first half of 2012, sales will continue to remain low as disk drive components are now costly for manufacturers.

Tami Reller, the head of marketing for the Windows unit, had a discussion with analysts last week, talking about the slow computer sales. Reller issued a warning regarding the impact the Thailand floods had and will continue to have.

“I just think it’s going to take a couple of quarters to work itself out. It would be naive to believe otherwise. The level in each of the quarters, I think that’s hard to exactly predict” said Reller.

Reller isn’t the only one issuing warnings about the Thai floods. A report from Gartner has confirmed a 1.4 percent decline in global PC sales for the fourth quarter, estimating that the disk drive shortages would be most felt in the first half of 2012.

Reuters writes that Barclays Capital analyst Raimo Lenschow said that despite the slow sales that affect Microsoft’s profits, investors won’t fret and move their business elsewhere. “(It is) clear that investors will continue to need to be patient. There could be positive short-term momentum…but we first need to see proper evidence of mobile/tablet success rather than just signs of hope”.

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Eli Wads is one of our expert authors in technology and business fields.Currently living in San Marino, Eli has graduated at Southwestern Academy with a Bachelor Degree in business in 2008. Contact him by dropping him an e-mail at

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