Microsoft Corporation (MSFT), Dell Inc. (DELL), Hewlett-Packard Company (HPQ): Which Tech Giant is the Safest When the PC Industry Struggles?

The worldwide PC industry has been getting weaker and weaker, significantly driving down the stock prices of several big PC makers, such as Microsoft Corporation (NASDAQ:MSFT), Dell Inc. (NASDAQ:DELL) and Hewlett-Packard Company (NYSE:HPQ).

On April 10, the IDC reported the worst decline in global PC shipments in a single quarter. In the first quarter of 2013, the shipments of worldwide PC came in at only 76.3 million units, a year-over-year decrease of as much as 13.9% compared to the first quarter of 2012. The drop in PC shipments was even worse than the forecasted decline of 7.7%. The IDC commented that it was the worst quarter since it had begun tracking the PC market nearly 20 years ago.

HP was still the leader in the global PC market, with nearly 12 million shipments in the first quarter, accounting for 15.7% of the total PC market. HP experienced a year-over-year drop of around 23.7% in its shipments. Lenovo was not growing or declining, shipping 11.7 million units, accounting for 15.3% of total PC market share. Dell Inc. (NASDAQ:DELL)’s shipment in the first quarter of 2013 was of more than 9 million units, 10.9% lower than its shipments in the first quarter last year. Dell came in as the third biggest PC maker on the market, with about 11.8% market share.

Microsoft Corporation (NASDAQ:MSFT) generates most of its revenue from Microsoft Business

Bob O’Donnell of the IDC commented that Windows 8 has not only failed to contribute positively to the overall PC market, but it also slowed the market down. However, I think Microsoft Corporation (NASDAQ:MSFT)is not affected as much as other big PC makers. The majority of its revenue and operating income, $24 billion and $15.7 billion, respectively, were generated from the Microsoft Corporation (NASDAQ:MSFT)Business Division. This division includes Microsoft Office system and Microsoft Corporation (NASDAQ:MSFT) Dynamics business solutions.

Interestingly, around 80% of the Microsoft Corporation (NASDAQ:MSFT) Business Division’s revenue derived from the sales to businesses. Consequently, this revenue and income stream could be considered relatively stable. After all it is not quick or easy to change a whole IT system. Actually, in the past three years, this segment’s operating income has increased from $12.1 billion to $15.7 billion. The Windows and Windows Live Division contributed around $18.8 billion in revenue and $11.9 billion in operating income. This segment is to develop and market PC operating systems and PC hardware products.