PC Growth Puts Pressure on Microsoft to Shine in Annual Report

Microsoft faces high expectations when it reports financial results for the year later Thursday because the company's key external variable -- worldwide PC sales -- are way up.

While Microsoft has consistently worked to diversify its revenues, PC sales with their simultaneous sales of Windows and Office remain a key indicator of Microsoft's quarterly and annual performance.

According to a research report released earlier this week by IDC, worldwide PC sales were up 16.6 percent in the quarter ended June 30, which is when Microsoft's fiscal year ends.

"This kind of growth in the PC market is just amazing," enthused Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker. "At some point we expect the flood of consumer and portable demand to let up, but so far falling prices and demand across regions and market segments continues to support growth. Such consistent growth raises the prospect that the recent replacement wave is being supplanted by growing adoption that could sustain higher growth into the future."

By regions IDC found that the United States saw year-over-year growth for the quarter of 11.7 percent; growth in Europe and the Middle East was above 20 percent; Japan experienced a gradual recovery; and the Asia/Pacific region also performed well.

Driving the market were low-cost systems and mobile systems, stimulating consumer adoption and commercial replacements, IDC reported.

Intel reported strong results earlier this week, largely on the back of increased PC sales and portable system sales.

From Microsoft, investment analysts are looking for sales of $10.2 billion, a 9 percent increase from last year. Earnings per share expectations are for a 12 percent gain to 31 cents.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.