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Microsoft (MSFT)’s Windows 8 and 8.1 Gained Ground, And Overall Sales Forecast Looks Good

Regardless of how stalled Microsoft Corporation’s (NASDAQ:MSFT) [stockdata ticker=”MSFT”] business seems to Wall Street analysts, the fact of the matter is that this company powers 90.73 percent of the Desktops and Notebooks around the world. Its nearest competitor at second place is Apple’s (NASDAQ:AAPL) [stockdata ticker=”AAPL”] Mac operating system which has only 7.54 percent market share.

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Microsoft released its latest upgrade to the much discussed Windows 8 operating system, Windows 8.1, in October of 2013. Last month, during December, devices running the Windows 8 and 8.1 crossed over 10 percent market share for the first time. A month earlier, in November, it only had a 9.30 percent market share. Effectively, last month Windows 8.x versions gained over 1.49 percent market share, reported The Next Web.

The gain represents a fundamental shift in the Windows userbase, as Windows XP users were forced to abandon the platform as Microsoft is discontinuing support and security updates for XP from April 8, 2014.

As Windows 8.1 was offered as a free upgrade, it will not provide Microsoft (NASDAQ:MSFT) [stockdata ticker=”MSFT”] with any revenue gain. However, discontinuing Windows XP will eventually drive the sales of Windows 8.x operating system further up over the course of next few quarters. Back in the first quarter of 2013, Microsoft’s revenues went up 24 percent (in the first three months) compared to the previous year’s first three months; as Windows 8 sales pushed revenues of the Windows division alone to US$ 5.7 billion from US$ 4.633 billion. However, overall as a company, Microsoft’s revenue has been declining since the start of 2013.

In the third quarter of 2013, Microsoft generated only US$ 18.53 billion revenue from its operations, indeed a sharp decline.

However, Microsoft has maintained profitability since the sharp decline it observed during the first two quarters of 2012. As of the third quarter of 2013, its EBITDA has gone down amid declining operating revenue but earnings per share is still at US$ 0.63.

However, sales estimates are looking good for Microsoft this year, the current estimate is set at US$ 25.05 billion by the end of 2014. Microsoft has a lot of new guns to fire this year in order to generate revenue instead of solely relying on its Windows division. The Surface line of products is doing well, as its sales doubled in the third quarter of 2013. Moreover, Microsoft is partnering up with various low cost phone manufacturers in the emerging market segment to sell Windows Phone 8 based cheap phones. Rumors include a deal between Microsoft and Micromax, an Indian phone manufacturer, and even Sony may have joined the bandwagon.

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Based on the growth forecast, Zacks just upgraded the company from “underperform” on December 19, 2013. If anyone is looking for investing in an established blue-chip company with growth in mind during 2014, Microsoft (NASDAQ:MSFT) is a good option right now, as the 1 year forward P/E is only at 12.86.

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4 Comments

4 Comments

  1. Emily Kulish

    Jan 2, 2014 at 4:26 pm

    If they add the start menu back, the market share will be at least 15% by now.

    • appleSUCKS

      Jan 3, 2014 at 12:42 am

      1st of all, Start NEVER went away. It simply got bigger and much better, with TONS of customization. 2nd, by “””RIGHT CLICKING”””(OR, pressing WINDOWS LOGO KEY+X at the same time, OR holding the new Start button on win8.1), you get “”””WINDOWS TOOLS MENU””””, that has everything you need, even more than the old boring start. I would NEVER EVER, want the old boring start back. Win8/8.1, is the FASTEST, BEST OS EVER MADE, with tons of shortcuts and featurrs.

      • Tecman

        Jan 4, 2014 at 10:42 pm

        I agree Apple sucks, but not as bad as windows 8.x. Also windows 7 market share gains were greater than windows 8 for December.

  2. Asok Asus

    Jan 7, 2014 at 11:26 am

    Windows 8.x has not, and never will be, adopted by the enterprise and small and medium businesses. The only reason it has sold at all is because it has been foisted on a hapless and ignorant public by big-box retailers beholden to Microsoft.

    The primary offerings of business class PCs from Dell, HP, Panasonic and Lenovo still offer Windows 7 Pro as the default OS option. Windows 8.x consumer PC sales for Dell were so abysmal that Dell was forced to re-offer Windows 7 on most of their consumer models.

    Windows 8.x has still not achieved the penetration at this same time period as Vista did at its equivalent release point, Vista being one of the worst operating systems (until Windows 8.x) ever released by Microsoft

    Windows 8.x has been a significant factor in the plummeting of PC sales since its release, and because of the monumental disaster of Windows 8.x for all PC vendors, they are currently desperately searching for alternatives to Microsoft products (such as dual-boot Android/Windows 8.x devices), having lost faith in both Microsoft’s management and Microsoft’s products.

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