Microsoft warns of poor Windows sales as PC shipments decline

Microsoft said sales of its Windows products are likely to be lower than analyst projections given the continuing global, industry-wide decline of PC shipments.

The Redmond giant issued the warning as Gartner reported sales of PCs declined 1.4 per cent year-on-year in the last quarter of 2011.

Microsoft's Windows unit chief financial officer Tami Reller, told investors at a Nomura Holdings event in Las Vegas that the PC market was not showing signs of recovery and that this would hit the firm's Windows' unit, according to the Guardian.

Windows sales have missed analyst estimates in three of the past four quarters. Microsoft's current financial quarter finishes at the end of this month.

"Firms like Microsoft and Intel need to start thinking about how to get customers to replace their PCs," Gartner analyst Ranjit Atwal told V3.

"Windows 8 will be a driver that Microsoft can use here."

According to a Bloomberg report, Microsoft is planning a restructure of its marketing operations team sometime in the next month, a move that could involve hundreds of job cuts.

The changes, led by Microsoft chief marketing officer Chris Capossela, are to streamline the firm's marketing effort and make it more efficient, said the report.

Microsoft's shares slipped more than one per cent on the combined negative news reports. 

Microsoft declined to comment on the marketing reorganisation and could not immediately comment on the Windows sales warning.

The gloom continued for Microsoft on Thursday after it was forced to deny that a workers' protest in one of its Chinese factories was due to poor working conditions.

The Foxconn-run factory is contracted by both Microsoft and Apple to manufacture hardware.

The protest was widely reported in the media because the workers were threatening to commit suicide. Workers have been quoted in reports complaining about the working conditions.

However, Microsoft said the protest was related to "staffing assignments" and "transfer policies".

"Microsoft is committed to the fair treatment and safety of workers employed by our vendors and to ensuring conformance with Microsoft policy," said the firm in a statement.