Best Buy (BBY) Investors on Edge as Windows 8 Pipe Dream Fades (MSFT)

December 4, 2012 10:25 AM EST
Microsoft (Nasdaq: MSFT) was hoping that its next-generation Windows 8 operating system would be the next big thing, selling Best Buy Co. (NYSE: BBY) on the idea in the process. Unfortunately, that isn't how it appears to be shaping up and Best Buy is seeing lower investor sentiment as a result.

Recent data from the NPD Group shows that sales of Windows-based devices have fallen 21 percent since the operating system debuted in October. Windows 8 sales amount to just 58 percent of total Windows unit sales, versus 83 percent for Windows 7 following its release.

Best Buy isn't known for getting huge margins on PC sales; its prices are generally competitive and many times better than peers. Best Buy hopes to garner strong margins via sales of extras like cables, software, and accessories. Other categories Best Buy generally aims for strong sales in are televisions and tablets.

One NPD analyst came to the rescue of Microsoft, saying Windows 8 isn't the problem; the problem lies in PC demand overall. Gartner recently said global PC sales fell over 8 percent in the third quarter, to 87.5 million units.

Whether or not PC and Windows 8 sales will remain tepid, or translate into a weak quarter, is yet to be seen. Even if PC sales don't pick up, Microsoft is aiming for more sales of tablets and smartphones that come equipped with the operating system.

For Best Buy investors, any signs of good news can't come soon enough. Shares are down 55 percent from the same period last year, with many now banking on founder Richard Schulze placing a bid for all shares of the company somewhere in the range of $20.

Best Buy is down about 0.9 percent on the session.

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