updated 09:13 am EDT, Fri April 12, 2013
Microsoft, HP shares suffer due to weak PC sales, troubled mobile strategy
Following reports published by Gartner and IDC showing the worst declines in PC sales on record, both Microsoft and HP shares have taken a beating, reports the Wall Street Journal. At the end of trading on Thursday, Microsoft shares shed 4.44 percent down to 28.94, while HP shares fared worse down 6.5 percent to $20.88 after it was revealed its PC shipments fell 24 percent. With the decline in PC sales directly attributed to the rise of the iPad and other tablet devices, the relatively weak performance of Microsoft and HP in the mobile devices segments has negatively affected investor sentiment in both companies.
The release of Windows 8 was expected to result in a boost to PC sales, however the dual UI, two versions of Windows including Windows 8 and RT, and the wide range of new devices is thought to have confused some buyers. Further compounding matters, Microsoft's gamble that tablet users wanted a full-PC experience appears to have backfired with sales of its own Surface range also languishing. Sales of the Surface with Windows RT, which is not backwards compatible with legacy applications, were well below expectations.
Instead, tablet devices running mobile-optimized operating systems with well developed app stores have proven to be more popular with many consumers who realize that they can get most of the core functionality they require from tablets without outlaying for a full PC. While Microsoft is reported to be developing a 7-inch Surface following data showing that 50 percent of tablet sales were for devices under 8-inches, HP all but abandoned its mobile devices plans when it controversially axed its WebOS tablet and smartphone lineup.