Thursday, December 16, 2010

Microsoft lacks tablets, Goldman Sachs not happy

Goldman Sachs says it expects lower PC growth than that forecasted in general estimates because tablets are going to gobble up the market.

The investment bank issued a report Monday maintaining its neutral rating on Microsoft.

The Goldman Sachs analysts expect PC sales to grow 8 percent and server sales 5 percent; other analysts have projected growth between 10 and 15 percent.

Tablets will cannibalize PCs by 33 to 35 percent, the report said. Goldman expects tablet sales to hit 55 million in 2011 and 79 million in 2012, compared with projected sales of 9 million this year. Apple has sold 7 million iPads, and several tablets based on the Android operating sysatem have started selling.

What does Goldman want from Microsoft for Christmas? "For an unlocking of shareholder value, we continue to look for a more aggressive dividend, a more focused consumer strategy and stronger cloud-Azure traction," the report said.

Also, they remain unimpressed by Windows Phone 7. "Our early read on Windows Phone 7 has not yet changed our view that Microsoft's share in mobile OSes will remain at only the single-digit level," the report said.

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