Microsoft’s lack of momentum, malaise won’t end anytime soon

“If you’re holding your shares of Microsoft until you can book a 10% capital gain, we have a bit of bad news. You may be waiting a very long time. Despite a spate of happenings at Microsoft — including its much heralded $3 dividend and the hiring of Ray Ozzie and the acquisition of his company — the giant tech stock has refused to edge upward,” Bill Snyder writes for TheStreet.

“Making matters worse, Microsoft’s inertia doesn’t seem to be a short-term malady. The company’s top-line growth has slowed while buyers wait for the next generation of Windows and a raft of related products. And even when the new software hits the market in late 2006 and 2007, it is not at all certain that it will give sales the kind of boost needed to get the stock moving,” Snyder writes. “Strong sales of PCs, nearly all of which run Windows and Office, would certainly help. But that won’t happen in the short term. Growth in the worldwide market for PCs is expected to slow to 9% in 2005, down from last year’s faster clip of 11.6%, according to Gartner, a technology research company.”

Snyder writes, “The trouble is, it is taking more and more of an effort to push consumers and businesses into upgrading their hardware and software. Simply put, many people are happy enough with what they have, despite well-publicized security flaws and other problems with the company’s software.”

Synder continues, “[Windows] Longhorn, scheduled for release next year, is likely to be a significant improvement over Windows XP, but it will lack some of the snazziest features originally promised by Microsoft. ‘It will have nice-to-have features, but not must-haves,’ says Martin Reynolds, a vice president and research fellow at Gartner. Moreover, it will take businesses several years to get comfortable with the new operating system. The shift to XP, which has been on the market for almost four years, is not yet complete, he added.”

Read Synder’s full article, “Microsoft Feels Like Lead,” here.

MacDailyNews Take: If “people are happy enough with what they have” then why does Credit Suisse First Boston expect total Mac units shipping in the fiscal second quarter to rise 35% year-over-year, above the research firm’s PC industry growth estimate of 10%? And why, for the last quarter of 2004, did Apple’s Mac shipments grow more than 25 percent, according to IDC, while the PC market as a whole grew at 13.7 percent (even before the debut of the Mac mini)? If Wall Street ever puts two and two together, AAPL shareholders better strap themselves in for blast off, there’ll be no lack of inertia for them.

[UPDATE, 11:13am: fixed headline, changed “inertia” to “momentum.”]

Related MacDailyNews articles:
Apple Q2 Macintosh shipments expected to outpace personal computer industry – March 15, 2005
BofA analyst: Mac mini likely to significantly strengthen Apple’s market share – March 14, 2005
Apple’s Australian Mac sales surge a massive 49.1 per cent, share jumps from 3 to 4.1 per cent – February 21, 2005
Apple’s Mac is not doomed to small market share forever; the ‘Ignorance Lag’ is ending – February 11, 2005
Analyst: Apple Mac worldwide market share could increase to 4.5 percent by end of 2006 – January 24, 2005
Mac mini is going to dramatically improve Apple’s share in the personal computer market – January 23, 2005
Apple shows strong Mac shipment growth, market share gains in fourth quarter 2004 – January 19, 2005
Report: Apple gained significant market share of computer industry during past quarter – January 12, 2005

29 Comments

  1. I’m pretty sure that on one episode of “Star Trek: Enterprise” I heard Captain Archer say “we’ll let our inertia carry us in” (or something like that!).

  2. inertia

    n 1: a disposition to remain inactive or inert; “he had to overcome his inertia and get back to work” [syn: inactiveness, inactivity] [ant: activeness] 2: (physics) the tendency of a body to maintain is state of rest or uniform motion unless acted upon by an external force

    Pretty much describes Microstink at this point.

  3. MDN: “If “people are happy enough with what they have” then why does Credit Suisse First Boston expect total Mac units shipping in the fiscal second quarter to rise 35% year-over-year, above the research firm’s PC industry growth estimate of 10%?”

    Answer: It is current Apple owners (OS9 and earlier) are realizing that their cable or ISP provider wants an OSX connection for DSL, plus the fact that a $499 Mac fits right into the budget of the Mac buyer.
    More Apple owners don´t use OSX as do. They want to upgrade – the cheapo mac plus new Tiger will boost sales.
    But don´t expect much business to come from the Windows converters. Yeah, there will be some.

    AND: Are you really so gullible that you believe some stock broker firm and their research prognostication misinformation? Stock ANALysts are always wrong. If they said the opposite would you believe them?

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