Microsoft Beats Earnings Estimate, Wall Street Still Concerned about Windows Sales

Microsoft seems to be in a no-win situation with Wall Street analysts who may or may not understand the underlying forces that drive sales of Microsoft's products. Despite better than expected earnings - and some of the uptick was attributed to an unusual, temporarily low tax rate - Wall Street is concerned that sales of Windows and PC sales overall are slowing. Perhaps most concerning to investors is the fact that Microsoft doesn't yet have a significant presence in the tablet market, which has exploded since the introduction of the Apple's iPad. That's the hot market at the moment, and everyone seems to think that tablets are going to replace traditional PCs.

Of course, that's a bit of a short-sighted view, especially in light of the global financial crisis and the fact that businesses rarely need to upgrade their PCs in the short-term. Many would like to, of course, but it's usually more of a luxury than a necessity for most traditional business models.

Microsoft's leading sales drivers were tied to its recent offering of a cloud-based Office service, strong sales from its XBox gaming system as well as nice performance from its server software division. Windows sales were down as were PC sales overall, and the correlation there is obvious. Some look at the overall global economy as the reason behind the slow PC sales - most of which would have Windows as their operating system. And while tablet sales are raging worldwide, they are limited to consumers.

Businesses won't be replacing their laptops or desktop PCs with tablets in the foreseeable future. Anyone who's ever attempted to send an important e-mail from their iPad will tell you that.