Microsoft does well where it counts - analysts

By IVCPOST Staff Reporter

Jul 30, 2013 04:56 AM EDT

According to analysts, the second quarter earnings report of Microsoft was not a disaster. It seemed like a fiasco to investors since the company's three-month 25% rally ended. Analysts added that the report revealed that the company did something right and another thing wrong which was just usual to businesses.

Microsoft's problem was the Windows division. The company's sales declined 6% year on year which further reflected 15% decrease in earnings from its PC sales. IDC and Gartner both said that the shipments of PCs fell 11% during the second quarter. These results should not be blamed on Windows 8 alone since Apple also said its Macintosh shipments plunged by 7%.

The Surface RT tablet's price was reduced which led to a US$900 million write-down. However, analysts said that the tablet represented the strengths of Microsoft which was its touch-capable PC operating system. They added that a great opportunity for Microsoft lies not with the cheap consumer gadgets where it possessed less advantage compared with Android and iOS but with the high-end market of tablets and PCs. Also, analysts hoped that its reorganization would help it figure out ways to deal with its strengths and weaknesses.

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