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Analyst Concerned About Microsoft, Intel on China Weakness

By - Source: Bloomberg | B 31 comments

Microsoft seems a natural companion for the growing concern surrounding PC sales. If PC sales stagnate, Microsoft is more than likely affected, given the fact that Windows accounts for about 36 percent of the company's revenue.

So it is not surprising that analysts and investors are adding Microsoft on a growing watch list, especially since China may not be able to bailout Microsoft.

Analysts predict that Microsoft will post a sales growth of less than 5 percent from a year ago for the second quarter. A article published by Bloomberg suggests that China can't flatten the valley created by slow demand in the U.S. and Europe, and may even worsen it by a more and more pronounced weakness in the market. One analyst called the outlook for this year "lousy" while another said that the PC industry may struggle to grow at all in 2012.

What makes this quarter rather interesting is the fact that there is a certain doubt that Intel will be doing well - or, at the very least, better than AMD. Typically, AMD has been much more affected my market swings than Intel, as Intel's market power often allowed it to balance out downturns. This time, however, there are plenty of voices that predict that Intel may be hit much harder than in previous times. There is also doubt that Intel will admit that it has been hit. Bloomberg quoted one analyst from Susquehanna International Group who believes that Intel will show optimism simply to keep its customers ordering products.

"Intel realizes that their view of the market influences the market because they are the market," said Susquehanna's Chris Caso. "They're trying to convince customers, investors and eventually the consumer that they're right." Intel will report Q2 results on Tuesday, AMD will follow on Thursday. Microsoft will reveal Q2 results on Thursday as well.

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  • 6 Hide
    amuffin , July 17, 2012 5:47 AM
    Intel would never manufactuer their chips in China, if they did, next thing you know there's going to be a copy!
  • 6 Hide
    x4dm , July 17, 2012 5:56 AM
    amuffin... so you are saying Dalian, China is not in China?
  • 4 Hide
    amuffin , July 17, 2012 6:00 AM
    x4dmamuffin... so you are saying Dalian, China is not in China?

    Didn't notice that...*facepalm*
  • 5 Hide
    blazorthon , July 17, 2012 6:10 AM
    Douglas Perry's article, second to last paragraph
    What makes this quarter rather interesting is the fact that there is a certain doubt that Intel will be doing well - or, at the very least, better than AMD. Typically, AMD has been much more affected my market swings than Intel, as Intel's market power often allowed it to balance out downturns. This time, however, there are plenty of voices that predict that Intel may be hit much harder than in previous times. There is also doubt that Intel will admit that it has been hit. Bloomberg quoted one analyst from Susquehanna International Group who believes that Intel will show optimism simply to keep its customers ordering products.


    Should that word that I put in bold be "by", not "my", or am I somehow reading this incorrectly?
  • 5 Hide
    Pinhedd , July 17, 2012 6:31 AM
    Since when do people in China actually pay for software?
  • -2 Hide
    Jerom , July 17, 2012 6:53 AM
    PinheddSince when do people in China actually pay for software?

    Software sales was always about companies and industries and those always pay for software.
  • 5 Hide
    _Cubase_ , July 17, 2012 7:03 AM
    Quote:
    Bloomberg quoted one analyst from Susquehanna International Group who believes that Intel will show optimism simply to keep its customers ordering products.


    It takes an analyst to figure this out?

    Or was the whole "lets show our customers how pessimistic we can be" a genuine option?

    Coming up next: Analyst predicts that bad sales mean sales will be bad! But company most likely won't tell customers that they are actually drinking themselves to sleep every night in a pit of sorrows.
  • 1 Hide
    blazorthon , July 17, 2012 7:05 AM
    JeromSoftware sales was always about companies and industries and those always pay for software.


    There is something like a billion people in china. Let's say that even only one percent of them buy a copy of Windows and/or MS Office in the next year. Theoretically, that's potentially one to several billion dollars' worth of revenue. Are you going to pretend that this isn't impacting, especially if piracy cuts down on it severely?
  • -1 Hide
    belardo , July 17, 2012 8:32 AM
    When you own 95% of the desktop market, you can only go down.

    Windows8 will not generate any additional PC sales, if anything - it will lower PC sales.

    Then theres going to be containers full of MS-tablets that only specialist and a few thousands PC geeks actually buy.
  • 0 Hide
    CKKwan , July 17, 2012 9:54 AM
    Oh Dear, now only I know American never use pirated software...
  • 0 Hide
    plekter , July 17, 2012 10:44 AM
    What about WP7/WP8 and all of the other Microsoft non-PC related projects?
  • -2 Hide
    Anonymous , July 17, 2012 12:03 PM
    HAHA, wait for the ALL TANKING Windows 8 on Desktops, PC market will positively shrink because of this, Intel-- MS is Screwing you over LOL!
  • 0 Hide
    mayne92 , July 17, 2012 12:06 PM
    "They're trying to convince customers, investors and eventually the consumer that they're right."
    It was so easy for Apple to come to mind here. Now to follow are Apple sheep to say they are.
  • 6 Hide
    venur , July 17, 2012 1:14 PM
    Personaly I'm not going to buy a new OS every 2 years thats it.
  • -2 Hide
    vkg1 , July 17, 2012 1:19 PM
    One more nail in the coffin of the evil US patent companies. First Microsoft, then Apple, then Intel, and finally google. Then the world will be free of the oppression of these evil companies that patent the obvious and trap people by being closed. After 50 years now we finally are seeing the age of Samsung, ARM, and free software finally liberating the world. The next step will be ARM smoked out by free architecture too.
  • 0 Hide
    marraco , July 17, 2012 2:00 PM
    I don't like too many things about Windows 8, so count me out, Microsoft.
  • 0 Hide
    eddieroolz , July 17, 2012 2:29 PM
    Well, at this point Microsoft can't really grow any further. But they'll still make a ton of cash from people replacing their older OSes.

    Speaking of which, if you're not running some industrial/enterprise applications, switch away from XP please...
  • 0 Hide
    olaf , July 17, 2012 3:03 PM
    Yeah im sure Windows 8 will help a lot :)  and i understand why people can't be botherd to shell out 50 euros or more on windows in china .... apropriate priceing for apropriate markets ....
  • 0 Hide
    blazorthon , July 17, 2012 3:16 PM
    john_4Is Microsoft still a monopoly, yes. Before you fanboys jump to MS defense ort thumb me down consider this. Can you go out and buy any PC and say you don't want Windows on it or would rather have Ubuntu, NO. So they are a Monopoly. That trend did start Dell was one of them but MS made sure to kill it.


    Actually, yes, you can buy a desktop or a laptop with Ubuntu on it. You can also buy one with Redhat or OpenSUSE, and OSX, among other operating systems that can be on a computer by default. Some OEMs even give you the option with at least some of their computers online.
  • 0 Hide
    blazorthon , July 17, 2012 3:21 PM
    vkg1One more nail in the coffin of the evil US patent companies. First Microsoft, then Apple, then Intel, and finally google. Then the world will be free of the oppression of these evil companies that patent the obvious and trap people by being closed. After 50 years now we finally are seeing the age of Samsung, ARM, and free software finally liberating the world. The next step will be ARM smoked out by free architecture too.


    You fail to realize that the evil isn't because of stuff not being given to you for free as if you're entitled to the whole world (which I'm quite sure that none of us are). Beyond that, Google isn't really evil through patents from what I've read about them and Samsung is no god-send. You're no better than a fanboy. Also, there's no such thing as a high-end and free processor architecture. They take a lot of money to design and that is something that would be nearly impossible to do in a timely manner and do it well without a lot of funding.
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