Tag: microsoft

Apple’s down but it’s far from out

Apple, iPadConsumer behemoth Apple reported its first quarter financial results yesterday and while it posted revenues of $54.5 billion and a net profit of $13.1 billion, compared to revenues of $46.3 billion and profits of $13.1 billion in the same financial quarter last year, profits were flat.

Gross margin fell to 38.6 percent compared to 44.7 percent in the same quarter last year. Apple is forecasting gross margins between 37.5 percent and 38.5 percent for its second quarter, with estimated revenues between $41 billion and $43 billion.

So, what’s the problem? CEO Tim Cook said that supply problems were a matter to be concerned about, despite media reports.  And Apple has got a stash of cash in its corporate coffers – not far short of $137 billion in both liquid ashes and in cash.  That gives it a pot of gold that would let it buy other companies to make a splash in new or other developing markets.

A bigger problem is its existing slew of products, including the wildly successful iPad and the solidly popular iPhone.  It does face a challenge on the tablet front – particularly so from Google and Amazon devices.  Microsoft Windows 8 using Intel chips may not be so much of a challenge.  Intel cannot necessarily lower the price of its microprocessors, given its business model and Microsoft appears to believe that tablet devices running the touch version of Windows 8 should command the same prices as Apple iPads, or be even more expensive.

Apple’s share price (AAPL: Nasdaq), stood at $460.15 at press time.

Retailers: Ultrabooks shunned, Windows 8 sales poor

Windows-8Consumers are shunning expensive Ultrabooks for strong features as well as making sure they try before they buy, retailers have said.

Despite hopes that Windows 8 and Ultrabooks would see a rise in sales over the Christmas period after a damp 2012, people kept their purse strings tight and shunned the internet to visit stores and make considered purchases.

One nation wide PC retailer said, speaking with ChannelEye, that in-store sales were higher than net sales, on average. “I think this is because people wanted to come in and have a play,” the retailer said. “It’s not like it used to be where you’d just buy a model over the net and if it wasn’t as good, replaced it a few years later – people are looking for reliable models that are worth their price tag”.

Another nation-wide retailer that stocks technology agreed, telling ChannelEye that try before you buy is growing and there has been a lot of footfall in the technology sections, where products are expensive and considered purchases. “The economic climate has dictated that this needs to be done to have an enduring product that complies to needs,” the retailer said. “Laptops are no longer throwaway products or hand-me-downs. They are important for business needs and therefore need to last and be easily upgraded”.

It was hoped that Windows 8 and Ultrabooks would get a Christmas boost after a slow 2012. However, research from IDC showed that Windows 8 failed to encourage shoppers to part with their cash, with many sticking to their old laptops and installing the new OS on there.

One source at a nation wide PC retailer, however, pointed out that the operating system was instrumental in pushing some sales, although Ultrabooks remained on the shelves.

“Sales of both were pretty poor for the Christmas period if I’m honest. Windows 8 pulled in more revenue, while Ultrabooks, slipped even further down.” the source said. “Laptops equipped with Windows 8 software did better than Ultrabooks, showing people aren’t fussed about size. They just want a reliable machine.”

IDC suggested the lack of sales were down to PC vendors getting too involved in promoting the touch feature of Windows 8, while Intel’s emphasis on its skinny form factor did it no favours as the price tag was still sky high.

The PC retailer agreed that at the moment, people aren’t looking for style, but “they are looking for a rugged laptop with business and necessary bells and whistles and there are lower end laptops that offer this, meaning people will pay a price for the OS but not the design”.

However, one distributor had other ideas on how the market had fared, claiming that his company had been left hardly any surplus stock of Windows 8 equipped hardware.

“Windows 8 did better than we expected over the Christmas period and we were hardly left with any surplus stock,” he said. “However, January has proved a little bit quieter. This is obviously expected. People paid for these machines at top end prices during the festive season because they want something that can be wrapped up and shown off under the tree. These people are probably who Microsoft was targeting. Those with money.

“Now, the sales are depending on people with lower incomes who just don’t have the cash to splash on brand new laptops,” the distie said.

How Microsoft and Intel lost the plot

The TitanicWhile no-one could say that the writing is on the wall for giant tech companies Intel and Microsoft, there is a warning there but so far it’s just written in invisible ink.

As I write this, Intel’s share price (NASDAQ:INTC) stands at $21.93 and Microsoft’s (NYSE:MSFT) at $26.90.  They’ve ticked along in this way for many a long year now and the only way seems to be down.

Signs of bombers approaching have been on the radar for many a year now, and both companies seem to be like supertankers, which take an awfully long time to run round.  The Vole and the Zilla have got complacent and failed to take steps years ago to re-engineer their businesses.

You still have time to have a wee and wash your hands before a PC boots up and despite the undoubted process advances Intel has made over the years, people are fleeing the Win platform in their droves.

Both companies have failed to make inroads into the smartphone and tablet market, even though they whined on and on about convergence for many a year.  Handset manufacturers, by and large, do not want to be in the tender embrace of the two companies which essentially dictated what went in the PC industry.

And besides, their basic technology deeply sucks, for different reasons. Intel is forced, because of its huge capital investment commitments, to put a premium on its notebook microprocessors while it is safe to say that its much vaunted Atom range is just a total flop.

Microsoft’s software has always basically sucked anyway and it’s only by cunning marketing that it achieved its pre-eminence in this side of the business. I don’t think anyone, apart from Intel executives, have got smartphones powered by Intel Inside. Oddly enough, at an Intel Developer Forum years and years ago, when it still had its StrongARM stuff, me and a few other journos did ask why Intel just didn’t go and develop really low power devices based on the ARM chip and give people what they really wanted.

While Intel and Microsoft have been shilly-shallying and, essentially, living in the past, competition has crept up and overtaken them.

And so at some point this year, current CEO Paul Otellini is to depart from his captain’s cabin at Intel, to be replaced by who-knows-who to guide the ship into 2013 and beyond.

Right now, and as an Intel and Microsoft watcher for nigh on 30 years, I just can’t see how these particular conjurers are going to pull any rabbits out of their magic hats. Maybe they’ll specialise in producing cabbages from up their sleeves, instead.