It's not a lot of assumptions, if you understand what is happening to their sales. I follow it pretty closely, as part of my investment strategy. I have to know what these companies are doing.
MS's Windows sales have been a problem since the middle of last year. This isn't because of the economy either, as Mac sales have risen strongly during the same period.
We can look to the 2011 financial year for both, which is over, but not exactly with the same timing. It will be more interesting to see it in Jan, to see the calendar years compared.
This year so far..............2.1%
Next 10 years est.........10.00%
Revenue growth last.....11.94%
This year so far.............25.49%
Next 10 years est..........18.00%
Revenue growth last......66.9%
Ms is still doing pretty well, but there are trends. Look at earnings growth so far this year as a percentages of the total from last year. Small. Now, look at Apple's, more than 25% of the total from last years 4 quarters. One is accelerating, and one is declining.
If you go to MS's financial reports, you will see smaller growth in almost every division. It began with Windows last year, when the others still did well, except for tools, which slowed down. But look at this years, and you will see Windows even slower, with Office and others slower as well. It took a year, but it's happening. I'm not the only one who notices these things, which is why MS's stock hasn't risen for 10 years. Actually, it's lower now than it was 10 years ago, despite the small dividend.
MS is being hurt by several trends. One is the smartphone, which allows business people to do things for which they no longer need a netbook. I know that doesn't seem possible, but many business people, on trips, don't need a laptop. They just used them because there was no good way to get e-mail, and read documents.
The iPad is hurting. SAP which recently bought over 12,500 iPads, and the same number of iPhones, stated that half of iPad sales were to businesses. That's about 20 million this year. And it's just the second year it's out! You can read articles on the business sites, and even PC mag about how people are getting along without their laptops by using iPads.
Businesses are buying more Macs, and there are now articles in the techfinancial sites about how to manage this increasing OS X portion of their business.
These aren't assumptions, guesses, or fanciful wishes. You can go to the many sources and read it yourself.
Smarter heads than mine are advising that MS should drop their consumer initiatives such as the XBox, for which they get little, Bing, from which they are losing several billion a year, with little, if no prospect of ever not losing money, their phone OS, from which, if they ever do get more than a minor number of licenses, will not be able to get much profit, given how little they can charge from it, and other areas. They should then concentrate on their business software, and windows.
Will they do that? Maybe after Ballmer leaves.
I am in no way trying to claim MS is doing better than Apple. I am simply saying MS is not a fail company by any means. There is a misconception that is you are not number 1 you are fail. That just is not true.