Microsoft Windows 8 Off to Slow Start?

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Sales of Microsoft's (NASDAQ: MSFT ) Windows 8 appear to be off to a slow start, according to a report from The New York Times .

The paper cited Acer's President of the Americas division, Emmanuel Fromont, who told The New York Times there's "no question" that sales are sluggish.

Across the board, 2012 has been a brutal year for PC names.

Chip makers AMD (NYSE: AMD ) and Intel (NASDAQ: INTC ) are down about 50 percent and 14 percent, respectively. Both companies have no major exposure to the emerging mobile computing market, and continue to rely on chips produced for classic PCs (to be fair, they both have plans for mobile chips, but such devices are not among their current portfolio of products).

Likewise, U.S.-based PC OEMs Dell (NASDAQ: DELL ) and Hewlett-Packard (NYSE: HPQ ) have also given shareholders abysmal returns. H-P has been hit by other factors -- the accounting issue at Autonomy chief among them -- but Dell hasn't had H-P's unique issues, and shares are still down almost 30 percent year-to-date.

Microsoft has thus far managed to avoid the struggles of its partners, as shares are up a modest 4.5 percent year-to-date (including a one percent drop on Monday).

Windows 8 might prove to be another Vista -- Vista being an operating system that was largely panned, only to be followed by Windows 7, a more polished version.

Yet, it may be too early to write off Windows 8 just yet.

The operating system was released just two months ago. Its predecessor, Windows 7, was largely well-received by tech critics, many of whom labeled it the best version of Windows ever. Although Microsoft has made it fairly cheap to upgrade, most PC users may simply have no good reason to make the switch.

Windows 8 has a number of "under the hood" performance upgrades, but the average user is likely to only see Windows 8 for its Metro interface. That interface -- optimized for a touch screen device -- brings little additional utility to a classic PC.

Thus, Windows 8 might see its growth primarily from the sale of new devices. On that front, Microsoft's flagship device, The Surface, may have struggled from limited availability.

Until very recently, the Surface was only available online or through a Microsoft retail store. With many states and urban areas lacking a Microsoft retail location, millions of consumers simply weren't able to get their hands on the device.

As for traditional PCs, and the host of new touch-enabled devices designed with Windows 8 in mind, demand may be curtailed by still fledgling economy.

Shares of Microsoft traded near $27 on Monday.

(c) 2012 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas

Referenced Stocks: AMD , DELL , HPQ , INTC , MSFT

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