Microsoft has delivered relatively stable gains since September 2013; however, 2015 sees a downturn in shares.
Microsoft has lost 11.8% in the last year to date and 12.2% in the last 3 months. Whereas share price stood at $49.58 in November 2014, investors are trimming their holdings and shares now stand at the $40 level. Much of the loss of confidence is being put down to Microsoft just not keeping up with Apple and Samsung in the mobile and new phablet market. Instead the tech giant has concentrated efforts on Hybrid Tablets/Notebooks, taking on Google in the Chrome notepad market instead of facing Apple and Samsung in mobiles.
As phablets, 5.5 inch+ screen mobiles, and smartphones take hold, industry data from IDC shows, ‘The worldwide smartphone market will reach a total of 1.5 billion units shipped in 2015, up 11.9% from the 1.3 billion smartphone units shipped in 2014. Many of the same drivers will be in play: broad and deep selection of smartphones from which to choose, prices fitting nearly every budget, and a steady refresh rate throughout the forecast period. By 2019, total smartphone shipment volumes will reach 2.0 billion smartphone units, resulting in a five-year CAGR of 8.5%.’
Microsoft has little to offer in the shape of a smartphone except the Lumia, which does not meet the needs of the phablet generation of users.
IDC also reported a downward trend in tablet users, saying, ‘Following the first year-over-year decline in worldwide tablet shipments in the fourth quarter of 2014 (4Q14), the International Data Corporation (IDC) has scaled back its five year forecast for the product category. Worldwide shipments are expected to reach 234.5 million units in 2015, a modest year-over-year increase of 2.1% from 2014. Although the outlook has been tempered, IDC still expects low but positive growth for the market in the years to come as demand in the commercial sector increases, and as Microsoft slowly gains a foothold.’
Reference to Microsoft’s market share of tablets and the company’s launch of Windows 10 is also noted by IDC, ‘"Microsoft is doing a lot of good things right now and we believe the launch of Windows 10 later this year will not only have a significant impact on Microsoft's share of the market, but on the industry as a whole," said Jean Philippe Bouchard, Research Director, Tablets. "There is an appetite for a platform that can provide a productivity experience that remains consistent across multiple form factors and device types, and we believe Microsoft is well positioned to capture some of that demand."
MT4 chart: Microsoft
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About IDC: International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets.