Latest Microsoft analyst attack uses misleading numbers

Today is a holiday here in the United States (Martin Luther King Day, for those of you outside the US) and naturally, this means a slow news day. That also means some articles can get more attention than others. That seems to be happening with an opinion column that was posted on Sunday on Forbes (well, it was on Forbes, but they must have thought it was crap too and have now pulled the post) which is not only innaccurate, but provides false contexts into Microsoft's current state.

The column was written by Adam Hartung, a managing partner at the consulting firm Spark Partners. Hartung has been highly critical of Microsoft in general, and CEO Steve Ballmer in particular, in the past. He wrote a May 2012 column for Forbes which called Ballmer "the worst CEO of a large publicly traded American company." (Forbes has since pulled the post but Hautung's own blog reprints the article).

His newest attack claims that people should sell off their stock in Microsoft ASAP. Why?  Hartung cites numbers that show PC sales were declining in the fourth quarter of 2012. However, he doesn't mention the fact that part of the reason was that many Windows 8 specific touch screen notebooks and tablets were in short supply in the final quarter of the year. Indeed, many PC makers say their sales numbers were at or close to what they had expected.

Hartung also cites unofficial numbers for the sales of Microsoft's Surface tablet at one million for the quarter. Again, he doesn't state that Microsoft had only modest sales expectations for the product, mainly because it was only sold at Microsoft Store locations for the first several weeks of its launch.

On the subject of the market share of Windows 8, Hartung claims that Windows XP still has 40 percent of the PC OS market share. As we reported today, that is flat out not true; indeed, Windows XP use has been on a rapid decline for the past year or so. Microsoft also recently announced it had sold 60 million licenses for Windows 8.

He concludes his analyst/rant by predicting that Microsoft will lay off as many as 60 percent of its team members in three years and will sell off its entertainment division, which includes its Xbox business; someone must not have shown him the huge Xbox 360 console sales numbers for the holiday season.

In short, there's no evidence to show that Microsoft is in anywhere near the apocalyptic scenario that Hartung claims is about to happen. We should learn a lot more about Microsoft's current state later this week, when the company announces its fourth quarter 2012 financial results.

Source: Adam Hartung's blog | Image via Adam Hartung and LeParisien.fr

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This is what happens when you pay people to give ridiculous opinons. FUny..Ballmer is runnign MS and he is a Billionaire. What is this guy? a Millionaire maybe!?

He also said
"The entertainment division could be spun off, sold to someone like Sony or possibly Barnes & Noble, or dramatically reduced in size. Unable to make a profit it will increasingly be seen as a distraction to the battle for saving Windows, and Microsoft leadership has long shown it doesn't know how to profitably grow this business unit."

Wait? WTF?! where can I get some of that crack he's smoking? Where is Sony or Barns & Noble going to come up with the amount of cash Microsoft would require to give up the Xbox brand that's now deeply embedded in Windows 8, Windows Phone 8 and Xbox Consoles?

Like Sony wants to buy Xbox, laughable. He has no knowledge over MS thats obvious, but neither over Sony (lets not forget the Sony Playstation division was created as a playing field. And never intended to be a division for massive profits. (ironically its the Playstation Division nowadays that's reeking in the profits )

But Sony would have the money to do so though. Sony is even to this day, a huge and massive company with allot of money in the bank.
Sony isnt the biggest player in our western markets anymore, but we all forget Sony is still a massive player in south-east asia (and that market is 3times as big as the western market, 700million versus 2,5-3billion)

says the "Analyst" that has over 30% of their own portfolio in Apple stock and 15% in Google stock..... humm... this is like the "Buy Gold" people that have tons of gold themselves that try to force the not so smart home investor to buy stuff that they will only lose money on while the big owners run to the bank richer

Analysts LOL. This guy is probably managing AAPL for his company,and he got ****ed and lost a ton of money,so he has to take his anger out on someone,and trying to spread misinformation.

Heres another piece from another analyst. Enjoy

Dumbass analyst

Cowen analysts Gregg Moskowitz surveyed more than 1,200 consumers between pre-order and Surface delivery times, and found that 64 percent of existing PC owners had not heard about Windows 8 by the time it was launching. Out of that, 32 percent saw Windows 8 favorably, while 18 percent less so.


Also, our study indicates Apple [Mac] and MacBook computers could take as much as 42 percent of the combined consumer PC/Mac market. This is concerning for [Microsoft], as Windows 8 likely won't be enough to slow Apple's PC momentum.

2 months in windows 8 has more users than any version of Macos

Yeah, I couldn't help but notice how conveniently he seemed to be ignoring Apple's falling share price as well as its stagnant market share in the PC market.

vcfan said,

2 months in windows 8 has more users than any version of Macos

I don't even think Apple cares about OSX anymore, they make too much money on iOS... which is sad, because it wasn't a bad OS... I think OSX will go the way of the xserve.... just die off and Apple say "well if you want a desktop OS go to windows or linux" kinda like they did with their server lines....

remember Apple isn't a computer company anymore...they changed the name... now they are an electronics company... aka could care less about computers... lets make a bunch of small devices!

neufuse said,
I don't even think Apple cares about OSX anymore, they make too much money on iOS... which is sad, because it wasn't a bad OS... I think OSX will go the way of the xserve.... just die off and Apple say "well if you want a desktop OS go to windows or linux"

OS X had a good run though. Oh well. Apple is probably going to ask iOS developers to switch to Windows. A Metro version of Xcode will be forthcoming (no use investing in the Windows legacy desktop).

You heard it here first!

neufuse said,

I don't even think Apple cares about OSX anymore, they make too much money on iOS... which is sad, because it wasn't a bad OS... I think OSX will go the way of the xserve.... just die off and Apple say "well if you want a desktop OS go to windows or linux" kinda like they did with their server lines....

remember Apple isn't a computer company anymore...they changed the name... now they are an electronics company... aka could care less about computers... lets make a bunch of small devices!


Apple server line couldnt compete in a fully saturated market. Especially since Apple has NO experience dealing with cooperate networks and environments. Where Linux and Windows have been doing this for 2-3 decades already. Anyone wanting to enter this market and gain any marketshare from Linux or Windows is going to have a very, very though time getting any marketshare at all.

Also OSX isnt that great of an OS, its advantage is optimization for a very limited set of hardware.

What's with the dodgy moustache? Does he expect to be taken seriously with that?

What was his disclosure on the article? These mutants are usually long aapl or goog at which point you can throw away any "opinions".

Thanks John for your post.

It appears that this type of trend for over the top bashing and analyst article sabotage toward Microsoft will continue. One of the major contributing factors is strongly due their investment in the apple stock being threaten.

A lot of the senior editors, columnist, and (BS) analyst like Adam are going out their way to protect their investment at any cost. But it's always a pleasure to see them fail at their attempt like so many others.

Thanks again.


The thing that struck me as the most absurd -- OK, OK, beyond the obvious 50 percent layoffs thing -- was selling the entertainment division to Sony or Barnes & Noble, two companies with some pretty big financial difficulties of their own.

I mean, Barnes & Noble just spun off their own Nook division with Microsoft's help. Where on earth would they get the money, and why would they want Microsoft's extensive line of products (primarily Xbox)? It just made no sense.

Um.. who cares if the original article was pulled? It's certainly news to me that this asshat of an analyst is out there spouting crap like this. It was pulled for being inaccurate and it's been posted here to fill in anyone who now cannot see it.

So the Xbox has been the top selling console now for over 2 years, Microsoft has rebranded all of their game, video and music services as "Xbox" on Windows & Phone, the division is growing in profitability and this guys reaction is that Microsoft is going to sell off that division?

Hmmm..... Seems like a pretty stupid prediction. Microsoft is moving towards being more consumer oriented, not less. The living room is one of the key areas where Microsoft is winning, and with the growing investment in retail stores, the Xbox is critical to those stores success.

Hartung claims that Windows XP still has 40 percent of the PC OS market share. As we reported today, that is flat out not true;

Umm, what? The article linked clearly says Windows XP still has 39% market share.

Astra.Xtreme said,

Umm, what? The article linked clearly says Windows XP still has 39% market share.

The worldwide PC market includes 2,500,000,000 PCs. The difference between 40% and 38,71 is over 30,000,000 PCs. So XP's marketshare is definatly declining and he is making it seem as if its holding strong. Just read the article he quoted.

Net Applications is probably an outlier. Many other market share trackers including Statcounter, W3Schools, and Wikimedia have it in the 20s. But even if it were in the 40s it still neglects the fact that it's hemorrhaging market share and has been for years.

Ronnet said,

The worldwide PC market includes 2,500,000,000 PCs. The difference between 40% and 38,71 is over 30,000,000 PCs. So XP's marketshare is definatly declining and he is making it seem as if its holding strong. Just read the article he quoted.

There's no reason to nitpick over 1.2%. Anybody that can use a little bit of understanding will realize what he meant. The precise number down to the hundredth is a useless bit of information in that context.

And for an OS that is over 12 years old, and has withstood 3 OS updates including the beast that is Windows 7, I would definitely say that XP is holding strong. You can't possibly refute that...

ModernMech said,

http://gs.statcounter.com/#os-ww-monthly-200904-201212

I wouldn't characterize that blue line that went from 75% to 25% market share as "holding on strong"

Not sure where they get their information from, but every other counter out there reported that XP dropped below 40% just before the end of the year. Hence why this article links to a source that reports 38.71%. Them saying XP is at 25% seems to be harshly off.

Major Plonquer said,
"There's no reason to nitpick over 1.2%. "

Well, 1.2% is more than half the total global market share that Apple has and more than double Linux.

And?

Shadowzz said,

To write off 1.2% as a statistical delusion is silly when its double the market share of one of the competitors.

Nobody is writing it off... Rounding off the number is a figure of speech. If you were talking to somebody about the value of PI, would you rattle off a million digits every time you say it? No. You round it off and it gets the same point across. Saying the guy is wrong because he didn't give the precise percentage is silly and delusional in itself. There are plenty of other stupid things the guy said that should be nitpicked.

Every bit of this guy's article is blatantly false. My favorite part is "6. As more and more of the market shifts to competitive cloud businesses Apple, Amazon and others will grow significantly."

Um, Apple does not have a cloud service for companies to use. They have a service they built upon other cloud services - provided by Microsoft - but they do not provide a service for developers to use. Amazon does, but not Apple. It is just further proof that this guy hasn't a clue what he is talking about.

Edit: and more indicating that he is wrong - the very first comment on that blog is the typical "It is the year of Linux" comment.

I don't know why people hate Ballmer. Him and his staff is guiding Microsoft to new frontiers to secure Microsoft's future. Sure it can be argued that they missed a ton of opportunity, and stumbled on some releases, but in the end Microsoft will endure and will remain relevant. A long term investor would appreciate this, rather than these short term investors that much prefer a higher volatile stock (AAPL, GOOG, AMZN) and would prefer shortcommings for short term profits.

Like selling XBOX? Who the hell would do that.

I'm sure that if he keeps repeating his hate speech every year, he'll be right eventually. But to sell MS stock? Even if Windows 8 becomes a massive failure and Android and iOS eat away its marketshare (which is doubtful, just imagine the field day hackers will have when Android becomes the main OS), then Microsoft will stil be huge on the business market. MS stock remains a good long-term investment.

If anything then investors should be happy that MS is at least reacting to the changes in the mainstream consumer market. If Windows 8 was just like Windows 7: a desktop OS made for a shrinking PC market, then I'd be worried. Whether the hybrid strategy will be succesful is too soon to tell but at least they're trying. Which is more then Microsoft has done the previous decade.

"He concludes his analyst/rant by predicting that Microsoft will lay off as many as 60 percent of its team members in three years and will sell off its entertainment division"
WTF? That guy is out of his damn mind.

MS needs to call up some lawyers.