Microsoft Corp is starting the new year much as it did the one just ended – grappling with weak computer sales tearing a hole in its core Windows business, while it gropes its way slowly into the faster-growing mobile phone and tablet markets.
Shares of the world’s largest software company are pretty much where they were a year ago too, and few expect much to change after the latest results are announced on Thursday.
“(It is) clear that investors will continue to need to be patient,” Barclays Capital analyst Raimo Lenschow said in a research note on Friday.
“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.”
Microsoft, which just wrapped up its last Consumer Electronics Show, gave a taste of the tough times it is facing last week.
Speaking with analysts on Tuesday, the head of marketing for the Windows unit flagged the most recent decline in PC sales and warned that the floods in Thailand disrupting crucial disk-drive shipments would put a drag on numbers for a while, making sales hard to foresee.
“I just think it’s going to take a couple of quarters to work itself out,” said Tami Reller, speaking about the effect of the shortages. “It would be naive to believe otherwise. The level in each of the quarters, I think that’s hard to exactly predict.”