More Bad News For Microsoft: PC Sales Forecast Slashed Again

Steve Ballmer Microsoft CEO

[credit provider=”Dan Frommer, Business Insider”]

Research firm Gartner has slashed its forecast of PC sales for 2011 dramatically, citing weaker than expected demand for mobile PCs in China and the continuing effect of tablets like Apple’s iPad.The company now predicts PC unit growth of 10.5%, for a total around 388 million. Previously, it expected a growth rate of 15.9%, which would have put PC sales over 400 million.

Gartner also lowered forecasts slightly for 2012, expecting growth of 13.8% (about 441 million units); it previously predicted growth of 14.8% (445 million).

This is the second quarter in a row that Gartner has been forced to revise its estimates downward.

10% growth is still strong, but the drumbeat of downward estimate revisions is bad news for Microsoft, whose Windows operating system still powers more than 90% of personal computers worldwide, and which is the company’s biggest and most profitable product, earning $12.7 billion on $18.8 billion in sales over the last four quarters.

Microsoft is hoping that Windows 8 will make it competitive in the tablet market — the OS is being redesigned to run on the low-powered ARM processors that run most tablets, and will have new interface elements for touch screens as well. But Windows 8 probably won’t be commercially available until late 2012.