Weak desktop sales weigh Microsoft down

Microsoft is starting the new year much as it did the one just ended — grappling with weak computer sales tearing a hole in its core Windows business, while it gropes its way slowly into the faster-growing mobile phone and tablet markets. Shares of the world's largest software company are pretty much where they were a year ago too, and few expect much to change after the latest results are announced on Thursday. "[It is] clear that investors will continue to need to be patient," Barclays Capital analyst Raimo Lenschow said. "There could be positive short-term momentum ... but we first need to see proper evidence of mobile/tablet success rather than just signs of hope." More worryingly for Microsoft, Gartner noted "continuously low consumer PC demand" over the normally buoyant holiday shopping season in the US, and a lack of excitement so far over the newest lightweight laptops championed by Intel Corp. That's bad news for Microsoft, whose financial success is still closely bound to computer sales. Wall Street expects sales of $20.9 billion for the fiscal second quarter — which would be a 5 per cent increase from a year ago and its biggest quarterly sales on record — but a net profit of only 76 cents per share, a slight dip from 77 cents last year.