That’s because late Wednesday, IDC reported PC sales slid nearly 14% in the first quarter, well below the 7.7% decline that was expected and the worst drop since the firm began tracking the sector in 1994.
To add insult to injury, Microsoft was downgraded Thursday by Goldman Sachs (NYSE:GS), Normura and Hilliard Lyons. All cited the ugly IDC numbers.
So what’s going on? Can these ccompanies — particularly Microsoft — evolve?
Charles Sizemore thinks so, based on hopes of getting Microsoft Office software on Android devices.
The tug-of-war between hardware and software always favored keeping Office native to the Microsoft Surface tablet. But that may be changing.
“It’s a bit of a game in that does Microsoft … minimize their plans to grow their tablet business by pushing Office onto their competitors, or do they hold out and see if they can generate margins?”
There’s also hope for the xBox business with innovative in-home entertainment options, Charles says.
So what do you think? Is MSFT a long-term bargain or a value trap? Check out the video, read more below and weigh in.
- Surface underwhelms at 1.5 million units sold by early March. (Bloomberg)
- A mini Surface coming? (Hexus.net)
- Don’t blame Windows 8 for falling PC sales (InvestorPlace)
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.