Friday, April 29, 2011

Two significant headlines tilting towards Apple's dominance

This morning I read 2 headlines which can be significant for Apple. 1 for its Iphone product, another for the Ipad. What we see here proves that Apple is gaining market share for 2 of its products, smart mobile and tablet. It is interesting to see that in these 2 segments - they are still very much at growing stage!

Microsoft Profit Falls Below Apple's After IPad Eats Into Windows Revenue

via Bloomberg
Microsoft Corp's Windows sales slumped last quarter as the iPad crimped demand for consumer laptops, marking the first time in 20 years that the software maker reported a smaller quarterly profit than Apple Inc.

Revenue in Microsoft’s Windows division fell 4.4 percent to $4.45 billion, the Redmond, Washington-based company said yesterday in a statement. That missed the $4.6 billion average prediction of analysts surveyed by Bloomberg. Net income was $5.23 billion, eclipsed by the $5.99 billion reported by Apple last quarter.

Consumer PC shipments dropped 8 percent in the quarter, Microsoft Chief Financial Officer Peter Klein said. Netbooks -- the cheap laptops that became popular during the recession -- plunged 40 percent, partially because of defections to tablet computers, he said. The decline overshadowed a better-than- anticipated performance from Microsoft’s Office unit and increased PC demand from corporations.

“You have to live underneath a rock not to know that the iPad has taken share from the netbook,” said Pat Becker Jr., principal of Portland, Oregon-based Becker Capital Management Inc., which holds Microsoft shares as part of its $2.5 billion in assets. “It’s a problem on the consumer side, and that’s a market where Microsoft continues to give up territory to Apple.”

Microsoft declined as much as 74 cents in late trading yesterday after the report. The shares, down 4.3 percent this year, had closed at $26.71 on the Nasdaq Stock Market.

Less Than Apple

Net income rose to 61 cents a share, from $4.01 billion, or 45 cents, Microsoft said yesterday. Excluding a 5-cent per-share tax benefit, earnings matched the 56-cent average of estimates compiled by Bloomberg.

The results underscore the ascendance of Apple, which surpassed Microsoft as the world’s most valuable technology company last May. The last time Apple’s profit was bigger than Microsoft’s was 1991.

While PC shipments to corporate customers rose 9 percent, tablet competition accounted for some of the sluggishness in consumer sales, Klein said in an interview.

“It’s fair to say tablet is some of that,” he said.

Total PC sales declined 2 percent last quarter, Microsoft said. That the Windows business performed even worse adds to the concern over Microsoft’s performance, said Brendan Barnicle, an analyst at Pacific Crest Securities in Portland.

“That’s suggesting some market share loss, some real deterioration,” said Barnicle, who rates Microsoft’s stock “sector perform.”

Another headline:

RIM Shares Plunge After Firm Lowers Guidance

Research In Motion shares were hammered in after-hours trading Thursday after the BlackBerry maker lowered its earnings and revenue guidance for the first quarter.

The company said it expects first-quarter earnings of between $1.30 to $1.37 a share short of analyst expectations of $1.48 a share.

Also, RIM said it sees first quarter revenue slightly below its previous guidance of between $5.2 and $5.6 billion.

RIM blamed the move to weak shipments of its BlackBerry phones and a shift toward handsets with lower price points. The firm has been struggling to compete against Apple's popular iPhone and other rivals of the smartphone market.

"This is the beginning of the slide," said Edward Snyder, analyst at Charter Equity Research. "The competition on the smartphone side of the business is getting very intense and they've not been able to field a decent smartphone, so they're going to start losing ground here."

"Increasingly, RIM is being relegated to the low-end, quasi-smartphone—without a flagship touchscreen, high-end smartphone, they are going to continue to lose traction," Snyder continued. "It's going to be like air coming out of a balloon slowly."

Serious Investing!

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