Shrinking PC sales take their toll on Microsoft’s Q2

Microsoft has warned of lower revenue and profits from the Windows division in Q2 following a contraction in PC sales. PC shipments in the last part of calendar 2011 were impacted by the floods in Thailand, which effected hard drive shipments. Microsoft has warned that the effect will take a few quarters to work through the system.

This is more bad news for the Windows division whose fortunes are closely aligned with PC sales because Windows sales have declined for several quarters now, largely due to the rise of mobile devices (see Smiles for Microsoft’s Q1 – but hiding a frown for the most recent analysis). The Thailand effect exacerbates the situation. This all bodes badly for Microsoft’s Q2 results, which are due on January 19.