Windows 8 will "disappoint": Analysts cut price targets on HP, Dell

Windows 8 will "disappoint": Analysts cut price targets on HP, Dell

Summary: HP and Dell have seen their target price lowered after Windows 8 was dubbed "a disappointment" in an analysts note.

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Analysts are warning PC makers that Microsoft's upcoming operating system may not prove as successful as they may have hoped.

The news should come as no surprise considering the tepid reaction to Windows 8 in the past few months following Microsoft's pre-release previews to developers. Analysts are expecting the knock-on effect to hit PC makers as much as it will hurt Microsoft, and lowered their price targets on both HP and Dell.

BMO analyst Keith Bachman did not pull any punches when he said: "Windows 8 will prove to be a disappointment, at least out of the gate."

HPQ, DELL ChartHP, trading at around $22 a share, is expected to see its stock rise further than Dell, but had its target price cut from $33 to $27 showing missed potential.

BMO cut Dell's target price to $18 from $20. Dell is currently trading at just over $15 a share on the Nasdaq.

HP still holds the crown as the world's biggest PC vendor with 17.2 percent of the global market share, according to Gartner. Dell holds the third spot in the global rankings at 11 percent behind Lenovo's 13.1 percent.

But HP and Dell, along with other PC makers, are hoping Windows 8 will boost sales. There's almost no doubt that the new release will bump the numbers but will likely not have the impact that previous iterations of Windows did.

Analysts have made it crystal clear that they do not expect Windows 8 to be as popular as Microsoft would hope, and thus the PC market will take the brunt end of the stick.

PC sales have performed poorly for most of 2011, yet still managed to scrape a 1.9 percent increase on worldwide shipments.

ZDNet's Ed Bott sees Windows 8 hitting the store shelves in October. Gartner warned Microsoft earlier this year that it has a small window to push out its forthcoming operating system, pegging a pre-Christmas release.

Image credit: YCharts.

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Topics: Operating Systems, Dell, Hewlett-Packard, Microsoft, Software, Windows

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108 comments
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  • I don't understand....

    PC sales have performed poorly for most of 2011

    Yet they still sold 1.9% more than the year before... Surely that doesnt make sense.....
    danjames2012
    • Hmmmm

      Bad research? Conflicting results?
      Gisabun
    • Compared to what? It's a relative thing

      IDC Global PC Shipment data show the following growth rates:

      2006 - 10.44%
      2007 - 15.6%
      2008 - 7.97%
      2009 - 4.62%
      2010 - 15.31%
      2011 - 2.1%

      Remember, we had an economic correction in there. 2011 was not good, no matter how you look at it.
      Info-Dave
      • You just outlined the reason...

        Look at your data, looks like every 3 years consumers require a computer replacement or update. The way they are building them these days you will be lucky to get 3 years out of them. Back in the day I have had laptops work for 5 years without any problems. So by your data another surge should come next year.
        workplaylive
      • Astounding!

        To me, it looks like normal growth, followed by a world wide economic downturn, followed by a year of recovery, followed by trouble for the PC industry. I don't see a 3 year cycle in the data.

        Factor these Wikipedia data in: Vista was released worldwide on January 30, 2007 and Windows 7 was released July 22, 2009.

        My opinion is that consumer PC replacement cycle is longer than it has been, and is currently longer than 3 years. Hardware performance has plateaued. Windows 8 may be shaping up to be more of a bump than a surge. Time will tell.
        Info-Dave
    • definitions + bad writing

      Does performance mean units sold, revenues or profits? Possible to be positive on some and negative on others.

      Anyway the Gartner press release linked in the article says PC sales grew 1.9% in 2012Q1 from 2011Q1. The poorly written article above implied the 1.9% growth was for 2011. Pity Ziff-Davis doesn't employ editors.
      hrlngrv 
  • Apple

    Your confusing short term moves with long term trends. Overall all for the year Apple is up 35% - those analysts are less idiotic than you think.
    rbgaynor
    • Unfortunately, analysts also play stocks, with other people's money...

      @rbgaynor:

      Apple In Free Fall: Down $110 - That's 17% - In Last 5 Weeks
      http://www.forbes.com/sites/ericsavitz/2012/05/17/apple-in-free-fall-down-110-thats-17-in-5-weeks/

      Apple's Drop Now Too Large To Ignore
      http://seekingalpha.com/article/595441-apple-s-drop-now-too-large-to-ignore

      Meet the men who carved $96B out of Apple's market value
      http://tech.fortune.cnn.com/2012/05/17/meet-the-men-who-carved-96b-out-of-apples-market-value/?section=magazines_fortune

      http://forums.appleinsider.com/t/150127/samsung-value-drops-10b-as-investors-fear-it-being-cut-out-of-apple-supply-chain/40#post_2111970

      Just from today's news. Want more?
      iYawn
    • How about these

      @iYawn

      Also from today's news - we can cherry pick these all day, doesn't prove much):

      Apple Still Very Much Worth Buying, Says David Einhorn
      Read more: http://www.minyanville.com/sectors/technology/articles/aapl-goog-msft-hlf-mmi-david/5/17/2012/id/41079#ixzz1vAoDWqcm

      Apple, LinkedIn Lead IBD's Top 5 'Fundamentals' Techs
      http://us.rd.yahoo.com/finance/external/investors/SIG=131ovn11b/*http://news.investors.com/article/611763/201205170502/apple-linkedin-lead-top-5-tech-stocks.htm?ven=yahoocp&ven=yahoo

      5 Stocks With 30%-60% Upside Right Now
      http://us.rd.yahoo.com/finance/external/pssa/SIG=12d6b5elp/*http://seekingalpha.com/article/598651-5-stocks-with-30-60-upside-right-now?source=yahoo

      Apple Being Used as ATM for Facebook IPO
      http://us.rd.yahoo.com/finance/external/cnbc/SIG=111rrbtqe/*http://www.cnbc.com/id/47466017?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo


      Oh, and that last article you quoted was about Samsung losing value (lots of value) on the rumor Apple maybe shopping elsewhere for memory.
      rbgaynor
  • Yup

    Couldn't agree with you more about these "analysts". In 2009, how many of these geniouses said that the netbook would have great sales years for the next few years to come. You need just one thing [iPad in that case] to screw things up.
    Gisabun
    • Disruptive Technology

      Products like the iPad are often referred to as a disruptive technology. They usually surprise arrive as a surprise and signal a fundamental change. They are incredibly hard for anyone to predict - if they were easy to predict there wouldn't be any surprise would there?
      rbgaynor
  • Analyst are just speculating up in the air !

    And dont forget they are comparing it with previous Windows version success and not other platforms. If the beta itself was more downloaded than earlier versions it should not be worse as well, particularly as it maintains all backward compatibility but bring new touch experience and friendlyness
    ninjacut
    • A Simple Metric

      How many negative reviews have you seen of the previews for Win8? Now ask yourself how many negative reviews existed of the previews for Win7? See a difference? It's only common sense that analysts are worried. Any time there's a major change in an established brand (e.g. New Coke) one needs to be worried.
      jgm@...
  • The quality of ZDNet's comments

    "These so called analysts are nothing but idiots" gets rated as the best ZDNet has to offer on this topic? Really?
    jgm@...
    • So called analysts

      .... are idiots. Pick an 'analyst' from any subject area, yes, I'll let you pick which one and just show us when/where/how exactly they get ever it right? How many of them put their money where their mouth is? And they are paid, often stupid amounts of money, to 'analyse' all day and then open their mouths. Considering this is their sole function, it is pretty amazing that we still pay any attention to them, but then we live in a world where people still put trust in politicians, religious leaders and look up to celebrities with talents as diverse as not being able to sing a note. Analysts and their ilk like telling other people what to think and on that one in a million occasion where they actually get it in the same ballpark, they like to proclaim themselves as being gifted prophets. Is that better?
      12312332123
    • To have to expect thuggery from thugs

      Influencing the ratings system on ZDNet is what Microsoft employees are doing instead of getting their products to market. They apparently believe that censoring others and up-rating each other will not be noticed as the organized, thuggish activity that it is.
      Robert Hahn
    • It's the in crowd

      They up comments pro MS, down anything negative. The argument doesn't matter to them.

      Significnat issues have been identified for Win8 for some months. Their response is to attack the commenter, in this case dismiss an entire profession!

      Hang in there MCSEs, I'm sure you guys are right this time;-)
      Richard Flude
    • @Richard Flude

      Yet your comment sits at a +4 currently...

      I find that odd.
      Badgered
  • They deserve it

    Twenty up-ratings for that one, eh? The Munchkins are restless tonight. ZDNet might as well take the ratings system down. For Microsoft people, it's all about them, and damn everyone else. This is why people hate them... and their company. They are thugs.
    Robert Hahn
    • Really?

      No for real... Seriously?
      Mr. Wet