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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.
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October 23, 2008 2:43 PM
Microsoft earnings: Netbooks soar, but may "cannibalize" traditional PC sales
Posted by Brier Dudley
Netbooks are why PC sales stayed strong in Microsoft's last quarter, the company said during its earnings call.
Netbook sales grew 8 percent, compared with "flat to low single digit" sales of traditional PCs. "Traditional" could refer to full-size machines, as opposed to the mini laptops using mobile chips.
Traditional is also where Microsoft makes more money: Netbooks run older, cheaper Windows XP (or Linux). That helps explain why Microsoft's client software sales were lower than the companies expectations.
Microsoft's trying to figure out whether the netbooks phenomenon is "cannibalizing" PC sales or creating a fast-growing new market segment. The answer is likely "both," said Bill Koefoed, the company's new investor relations manager.
Holiday quarter PC sales should be up 10 percent to 12 percent, but through June the growth range is 8 percent to 12 percent, CFO Chris Liddell said.
"Traditional, mature market PC unit" sales will grow "low single digits,'' he said.
In emerging markets, where Microsoft and PC makers offer cheaper machines, growth will be "mid to high teens."
I think he said that netbooks will add 5 percentage points of growth to the overall PC market.
Liddell didn't say anything about Mac sales, but this echoes Apple's lowered forecast.
During questions, Liddell touched on the netbook cannibalization question:
"It will affect the margins but some of that will be incremental growth we wouldn't otherwise have had," he said.
Dec 19, 08 - 05:03 PM
Happy holidays!
Dec 18, 08 - 11:51 AM
Dish Network, in contract spat, pulls plug on KOMO
Dec 18, 08 - 12:00 AM
McCaw's video startup 1Cast upgrades, lowers sign-up gate
Dec 17, 08 - 11:32 AM
Browser attacks, cheap iPhone myth, VC gloom and more Techmeme culls
Dec 17, 08 - 12:00 AM
Ex Amazon.com chowhounds launch Foodista, a Wikipedia/IMDB for food


- Pelicans fall out of sky from Mexico to Ore.
- 11 gay bars get letters threatening ricin attacks
- In Duvall, all roads lead to deep water
- As stores close, Starbucks buys a jet
- Enumclaw-area animal-sex case investigated
- KING-TV: Seattle P-I for sale, could close
- Could Greg Knapp bring a new style for Seahawks offense?
- Kirkland's Jason Mesnick spills about "The Bachelor"
- Washington attorney general requests new laws
- Despite drying, cooling trend, flooding and road closures continue
- Israeli forces bisect Gaza, surround biggest city
589 - 11 gay bars get letters threatening ricin attacks
230 - Western Washington dropping football
129 - Food crisis is global warming's biggest threat, say UW, Stanford scientists
125 - The great divide
122 - Stanford game thread
94 - Seattle Post-Intelligencer for sale, could close
87 - As stores close, Starbucks buys a jet
68 - Schultz took Starbucks' new jet to Hawaii for the holidays
47 - January questions, volume two
46
- As stores close, Starbucks buys a jet
- Despite drying, cooling trend, flooding and road closures continue
- Washout: Unprecedented flooding forces evacuations, closes highways
- Pelicans fall out of sky from Mexico to Ore.
- Divorcing husband wants kidney back
- Eating certain foods together helps with nutrient absorption
- KING-TV: Seattle P-I for sale, could close
- 11 gay bars get letters threatening ricin attacks
- Finding beauty among ice at Shoreline's Kruckeberg Botanic Garden
- New Seattle phone line helps immigrant victims of domestic violence

December
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Gadgets and games | Fun stuff I've written about lately includes Apple's iPhone, Hewlett-Packard's HDX laptop and Microsoft's Halo3. Also on the radar are new digital video boxes such as the Tivo HD and the Vudu.

