The beloved PC is on a downward spiral, Microsoft bosses have warned.

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Pictured: Microsoft Windows 7.5 operated smartphone, which appears to be taking over from PC’s.

The shock warning came as only yesterday, analysts Gartner calculated a 1.4% drop in shipment numbers in Q4 last in preliminary estimates, while IDC also said the category, which includes notebooks and laptops, had slumped 0.2%.

However, two of Microsoft’s top dogs warned yesterday the fall in PC sales for Q4 last year could be far greater than analysts predict and warned sales could be in for an even sharp(er) slump, Bloomberg reports.

“As the numbers come out, you’ll likely see that number decline further as the impact has been felt faster than people had anticipated,” Koefoed  told a JPMorgan Chase conference in Las Vegas, where brands like Lenovo, Samsung and Dell were all showing off their computing wares nearby at CES electronics show.

This assertion was echoed by Tami Reller, CFO and chief marketing officer of Microsoft’s Windows and Windows Live Division, at a separate event also held in Vegas on Tuesday.

And all this is bad news for Microsoft, who’s core Windows business is closely tied with PC sales, and have warned of lower profits and revenues to come as negative growth bites.

As for 2012, the outlook for PC sales is still uncertain, Reller also indicated. 

This slump is blamed on the recent floods in Thailand, which hit supply of hard-disk drives (HDD) last year.

Analysts predict the full brunt of this shortage will be felt in the first half of 2012 and could continue well into next year.

However, its not just hard drive shortages that have hit the PC market – the advent of smartphones and tablets like Moto’s Razr and Apple’s iPad 2 – many running the dominant Android or Apple iOS, have also diverted consumer attention away from the traditional computing systems like laptops, desktops and Windows software.


Microsoft will be hoping its new tile based Windows 8 OS – which will run across smartphones, tablets and PC will revive its fortunes and play catch-up with current mobilty leaders Google and Apple.

Microsoft demoed its much anticipated Windows 8 at CES this week, which is to be released later this year.

HP, Lenovo and Dell all made it to the top 3 PC vendors, according to Gartner analysis, with Lenovo showing off its IdeaPad Yoga 13 tablet at CES which will run Windows 8, Dell’s Ultrabook and (possibly) a consumer tab both running off Windows, meaning this year could be a make-or -break year for the Redmond giant.

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