“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
TO MDN
Having had a cable modem for nearly 7 years cable or ISP providers may officially support OSX for DSL or cable, there’s no REQUIREMENT.
As long as a machine could get an address via DHCP it would work and pretty much alwyas has. Ther ehave been some problematicISP’s but my parents just got a new DSL line and are stll using OS 9 (they’re comfortable with it) No issues involved
In answer to the questions:
Q. how did Apple lose them?
A. Back in the early and mid-nineties Macs (as most of us remember) had big crash issues. We restarted our Macs 3 times a day, that is one reason that no longer exists with OS X. I think Apple lost many customers during that period. There are many people who used PCs at work and decided to do the same at home. Even to this day most Windows users are confused on compatibility issues. IE. they assume that Mac documents are not compatible with Windows documents.
Q. If a person owns macs and Peecees – is he/she a mac owner or a Pc owner?
A. This is actually quite a common circumstance. It is even more common that they are a PC user (at work) and a Mac owner (at home). My take on it is this; what counts is which side is growing faster, that is are more people switching from PCs to Mac or from Macs to PCs. Right at the moment things are clearly going towards the Mac in an overwhelming way (which is why the Mac platform will probably grow around 30% this quarter vs. 10% for the industry as a whole). Another important group are young people who may never have owned their own computer. I am seeing increasing numbers of these first time buyers getting Macs.
Retail Boy,
Is your store selling macs only or PCs too ? What kind of store is it ?
Do you see major changes in terms of market share and in people’s minds ? What do people say about Microsoft ?
I’m curious about the switchers. What do they think of Apple now ?
Have you ever seen anyone who went back to Windows after trying OS X ?
A jump in home computer sales for Apple, YES. But why most people think it’s not going to happen yet in businesses ?
Businesses are made of people, so when more and more of them are happy with their new Macs at home, they’ll talk about it at work and tell their boss about how much more productive and virus-free they are.
Apple is slowly but surely growing its presence in homes, and soon enough businesses.
Anyway…
Inertia is that property of an object that resists changes in momentum — in other words, it’s momentum that keeps an object moving (or not), and inertia that (assuming constant mass) stops it changing velocity.