Microsoft CEO Steve Ballmer had high hopes for Windows 8. Windows 8 was suppose to change the way people viewed the OS, but it’s starting to look like some vendors are having buyers remorse with the windows 8 brand. Some investors and analysts believe Windows 8 will confuse windows customers because of the new constructed UI. With the decline of PC’s this could be the last chance Microsoft has to rebuild the Windows brand.
Windows 8 Expectations Plummet and PC Trends to Remain Difficult. The sentiment around Windows 8 was overwhelmingly negative during our trip as the supply chain is experiencing little life ahead of the October 26 launch. Although October is expected to be the sweet spot for the notebook ramp for Windows 8, and further follow through is likely in November, we were warned of idle facilities in December. One of our contacts does not expect Windows 8 to be material until the second-half of 2013. Similarly, the enthusiasm around the Ultrabook ramp has also deteriorated as the cost structure remains too high under Intel’s (INTC-$21.48: NR) specifications. Given these disappointments, we believe the PC industry is headed for a muted December quarter and well below the ramp expected with new products. In our coverage universe, Dell (DELL-$9.69: Buy) has the most exposure to the PC market at 50% of sales, followed by Hewlett-Packard
