Global Trends Favor Microsoft Corporation (MSFT)’s New Surface Pro

Page 1 of 2

Microsoft Corporation (NASDAQ:MSFT) has unveiled the Surface Pro, the latest addition to the company’s line of tablets. The Surface Pro comes with Windows 8 Pro, which is very useful to businesses that want the power of a personal computer PC in a tablet. Below, I will explain how the global trends in the tablet market will support strong sales of the Surface Pro. Specifically, I will examine the effects of rising tablet sales around the world and the shifting preferences of consumers shopping for tablets. I will show how increased demand for tablets worldwide will help Microsoft Corporation (NASDAQ:MSFT) sell more tablets, which will increase the company’s long-term value on a discounted cash flow basis.

Global Demand

The demand for tablets is rising worldwide. According to International Data Corporation’s (IDC) Worldwide Quarterly PC tracker, tablet sales increased by 75.3% in the fourth quarter of 2012, with shipments growing to 52.5 million, up from 29.9 million in the same period of 2011. Tablet sales were driven primarily by the increase in choice of products. Due to the rising demand and strong prospect for growth, IDC was forced to increase its market forecast for 2012 to 117.1 million units, up from its previous forecast of 107.4 million units. IDC upgraded its 2013 forecast from 142.8 million units to 165.9 million units, also stating that tablet shipments may hit 261.4 million units by 2016.

Top 5 Vendors, Worldwide Tablet Shipments, Fourth Quarter 2012 (Preliminary) (Units Shipments are in millions)

Vendor 4Q12 Shipments 4Q12 Market Share 4Q11 Shipments 4Q11 Market Share 4Q12/4Q11 Growth
Apple (NASDAQ:AAPL) 22.9 43.6% 15.5 51.7% 48.1%
Samsung 7.9 15.1% 2.2 7.3% 263.0%
Amazon 6.0 11.5% 4.7 15.9% 26.8%
ASUS 3.1 5.8% 0.6 2.0% 402.3%
Barnes & Noble 1.0 1.9% 1.4 4.6% -27.7%
Others 11.6 22.1% 5.5 18.5% 108.9%
All Vendors 52.5 100% 29.9 100% 75.3%

Source: IDC Worldwide Quarterly Tablet Tracker, January 31, 2013 (preliminary data)

The chart above shows IDC’s research results in fourth quarter 2012 on worldwide shipment sales. The figures included number of shipment for the top five vendors and others. All vendors made 52.5 million shipments, up from 29.9 million in 2011. Even though Microsoft Corporation (NASDAQ:MSFT) didn’t make the top 5 vendors, it’s just entering the market. If it works to bring down its prices, it will become competitive in the new year.

“We expected a very strong fourth quarter, and the market didn’t disappoint,” said Tom Mainelli, research director, Tablets, at IDC. “New product launches from the category’s top vendors, as well as new entrant Microsoft Corporation (NASDAQ:MSFT), led to a surge in consumer interest and very robust shipments totals during the holiday season.”

Financials

Microsoft Corporation (NASDAQ:MSFT) announced record first quarter revenue of $17.37 billion for the quarter ended September 30, 2011, a 7% increase from the same period of the prior year. Operating income, net income, and diluted earnings per share for the quarter were $7.20 billion, $5.74 billion, and $0.68 per share, which represented increases of 1%, 6%, and 10%, respectively, when compared with the prior year period. However, figures for Surface weren’t reflected, having not been launched.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

The 5 Most Popular Rap Songs of All Time

The 10 Countries that Eat the Most Meat

The10 Most Expensive Countries to Fly To

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!