Microsoft shares decline after downgrade due in part to increased competition from Apple’s Mac

MacBook Pro“Shares of Microsoft Corp. edged lower Wednesday after Global Equities Research analyst Trip Chowdhry downgraded the software giant in part due to increased competition from Apple’s Macs to its Windows operating system,” The Associated Press reports. “Chowdhry, who downgraded Microsoft to ‘Equal Weight’ from ‘Overweight,’ said in a note to investors he does not expect the company to see any upside to his estimates for the next 12 to 18 months.”

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“Increasingly, companies are giving their employees a choice to either use Microsoft Windows PCs or Apple Inc.’s Macs, the analyst said. And, increasingly, employees are choosing Mac over Windows,” AP reports. “To boot, Chowdhry said 70 percent of college freshman are entering school with Macs, up about 10 percent to 15 percent from a year ago.”

AP reports, “‘Our research is indicating that Microsoft is unable to connect with the new generation of users,’ Chowdhry wrote, adding that this could cause problems down the road when these students enter the work force and once again pick Macs over Windows.”

Full article here.

MacDailyNews Take: When we wrote the following back on January 10, 2005, many laughed:

As we have always said, even as many short-sightedly waved (and continue to wave) the white flag, the war is not over. And, yes, we shall prevail… No company is invincible. Not even Microsoft.

We don’t hear any laughter today.

[Thanks to MacDailyNews Reader “BackMook” for the heads up.]

32 Comments

  1. I love my Apple products but always be wary of a company that gets most of a market share. They get complacent and start to create inferior products as is happening to Microsoft (already happened to IBM). The same could happen at Apple. I hope Apple keeps that fresh underdog work ethic so that we have great products for years to come

  2. Apple’s success has been a remarkable story. But just like MDN’s take was correct, this should also not be laughed at:

    No company is invincible. Not even Apple.

    As a shareholder I hope for Apple’s continued success, but I won’t be one of the people emotionally attached and holding onto my stock if if comes tumbling down.

  3. Apple’s Mac business will continue to thrive and beat the industry average, as long as there are plenty of Windows users to make into first-time Mac users. Existing Mac users will obviously buy a new Mac to replace an old Mac. But the majority of current Mac sales are going to first-time Mac users (AKA former Windows users).

    Fortunately, that source of new Mac users is not going away anytime soon.

    Anyone who said Apple is giving up the Mac business is a fool. I expect Apple’s Mac sales to grow as it never has before, during the next five years.

  4. Yeah, back in the day when all corporate upper-mgmt abdicated the tech responsibilities to ‘The IT guy”, IT could continue to foist Winblows on all employees and there wasn’t a damn thing anybody could do about it.

    Now, after having gone through a plethora of trojans, virae, security breaches, upgrades, patches, ‘fixes’ and downtime, companies are finally letting employees use the superior computing platform in the workplace.

    Oh, and *if*, for some reason, they absolutely need to use a Windows program, Macs can do that too.

    As MDN has repeatedly stated, “The Dark Age of computing is finally coming to an end.” Amen.

  5. @ChrissyOne
    It is incredibly difficult to make all the right calls technology wise.

    S. Jobs will go down as the best, because of his consistency and prescient decisions. Remember, Apple made many wrong moves earlier (80’s and 90’s) not sure which ones S. Jobs was involved in. (Motorola processors for one come to mind, they just didn’t keep up with Intel)

    Leaders like S. Jobs come along very very rarely, Apple may have a great mgt team in place, but I’m guessing they are executing Job’s plan, the team probably have a hand in forming the plan, but I’d bet the plan is still 70-80% Jobsian.

  6. As long as Apple keeps “sales” people out of the most important leadership positions, Apple will do just fine.

    Apple’s ascent in the past few years has happened and continues to happen because of their long-term strategy, and is not the result of some flash-in-the-pan. Apple’s synergy is astounding.

  7. We are sending off one of my children off to college next week with a brand new MacBook Pro. All of his friends also purchased new Mac laptops for school and not one of them bought a PC. They also will be taking with them their iPods (Touches) and some have iPhones as well.

    There you have it, the necessary off to college gear. Don’t forget a backpack and a bike. Now if we can get him to study and not just waste time and money, I’ll be greatful.

    Oh, by the way I would like to thank SJ for making it possible for me to pay for my childrens college education. Thanks Steve!

  8. Just another day in a decade-long trend.

    That being said: no company is invincible, including Apple. It cannot rest on its laurels either. Inability for Apple to plug longstanding holes in its Mac product range, tidy up iTunes, get MobileMe launched correctly, sell hardly any Apple TVs, make nice with Sony and the BluRay camp, and so forth are all areas of weakness that will get exploited by competitors.

    But thank goodness that MS continues to falter, because it is true that they just don’t have any class.

  9. @ChrissyOne…

    Sony has a focus problem. Not only do they try to make almost everything, but they have models that cover almost every imaginable price point. Just look at their HDTVs (about the best things they make). There are dozens of models and 3 or 4 different price tiers.

    Apple did that in the 90s and it nearly killed them.

    Now Apple targets markets and releases only a few models. While it may be a bit frustrating for us users (where’s the Half-MacPro in a pizza box size?), it keeps Apple tight and focussed.

  10. Yesterday I arrived at the university where I teach and as I entered the elevator in one of the main buildings, there was an ad on the kiosk where the student newspaper is available for pickup. The ad shows a photo of a Dell laptop and spouted some specs (including Windows 7 Home Premium) with a price of $999. Then it said, why would one spend $2,100 for this? It showed a photo of a MacBook Pro. When I read the bottom, it said “Sponsored by Dell University.”

    I understand why they engage in this type of marketing. At my university, I have seen (anecdotally speaking) a shift from where about 20% of my grad students were using Macs five years ago to where about 80% are using Macs today. A definite shift. Of course, I am quite a Mac evangelist, since I extol the virtues of buying a Mac every chance I get. Some of the the students even jokingly call me Professor Mac.

    Apple and the Mac OS is the present and the future. Windows 7 is better than other versions of Windows I’ve seen in recent years, but it still cannot, in my opinion, compare to Mac OS X.

  11. @Mr. Reese- or “Where’s the ‘headless’ Mac?!?!” Jesus, have I gotten sick of hearing that tired whining. It seems to have died down as of late, but there are still those (read: geeks and techie types) who want Apple to release a cheapass expandable POS box. Not… Gonna… Happen…

  12. “… 70 percent of college freshman are entering school with Macs …” YES! This is what a freshman told me last year. She believed that the freshman students were 75% or more in her state college.

    • This is LAST YEARS number. (They are not in school yet.)

    • NO ONE WANTED TO REPORT THIS LAST YEAR OR THE YEAR BEFORE!!!

    • Even Steve Ballmer can see the rats leaving the sinking ship. What other KEY group is not being reported? They try not to count ALL the OS X and iOS 4 computers. Go ahead, skip them, the truth is all around you. I SEE THOSE APPLE LOGOS & LITTLE WHITE HEAD PHONES!!!

  13. One has to wonder when the tipping point actually will come. With the number of college students buying macs, it can’t be long. I wish I had spent the money buying apple stock instead of purchasing my PowerBook G4 way back in 2003.

  14. Buy AAPL stocks!!!!!!!
    In 2011 AAPL will be at $401 ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />
    Apple is a growth company with several Upside avenues to earn even more Revenues! This FY2010 it’s about $62 Billion and it was $20 Billion in 2006!!!!!
    Ready for $100 Billion in 2012 ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    I supported Apple since 1990 by using Macs and by retirement time my AAPL stocks will Support me ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    Buy Now!!!! AAPL will go Up $100 every year Towards 2017:-)

  15. 70% of the Freashman Class is using Macs. The main reason is the free iPod touch with every student’s iMac/MacBook purchase.

    If only Microsoft would give away a free Zune HD with every Netbook purchase.

    Ha, ha, ha. Who am I kidding? Using both a Netbook and a Zune for a full year would cure anyone of Windows PC use forever.

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