These are tough times to be a Microsoft (MSFT) shareholder.
A survey from Avast shows over 40% of current Windows owners are planning to switch to Apple (AAPL) gear when their present hardware gives out. The survey, of 135,000 people, showed 16% looking to be in the market and Microsoft losing two in five of them.
Worse, usability guru Jakob Nielsen (friend of the blog) has slammed Windows 8, saying it tries to combine two different user interfaces and winds up failing at both.
On a regular PC, Windows 8 is Mr. Hyde, a monster that terrorizes poor office workers and strangles their productivity," he writes.
Hiring Jeannette Wing from Carnegie-Mellon as the company's new director of research is also a coup, and a clue as to the company's future direction. She is a leading figure in formal methods, security and privacy, all of them vital to such managers.
Thus, it seems that Microsoft's future is to continue its move "up the stack," away from the consumer market and into the business market. Apple does not compete in this space - the main foes are IBM and Linux. IBM (IBM) is a frenemy that does put Windows into its customers' offices, while Linux doesn't offer the "big vendor" comfort many managers feel they need.
Microsoft results in the next quarter could surprise on the upside, making it a bargain at current levels. It generally takes three dollars in 10 to the bottom line, it lists $66 billion in cash, it hasn't felt forced to go on an acquisition binge to fund growth, there's a safe dividend yielding 3.46%, and when you take out the cash the PE is about 8.
But if the company can't fix its consumer market problems, you may be looking for a reason to sell after January.
Disclosure: I am long MSFT.