Microsoft and Intel beat expectations

After a tough 2011 of tablet competition and Thai floods, the PC industry is showing signs of life again, judging by this week’s earnings reports from leading tech companies.

Microsoft said on Thursday that PC sales grew in the three months to the end of March – a big turnround from early in the year, when Gartner, the research firm, had expected a 1.2 per cent decline for the quarter.

Intel, the dominant PC microprocessor maker, reported on Tuesday there was “softness” in the consumer PC segment in mature markets, but this was being offset by enterprise sales and strong demand in emerging markets.

China passed the US last year as the world’s biggest PC market and the IHS iSuppli research firm predicted on Wednesday that it would grow 13 per cent in 2012.

That should be helped by the Intel’s introduction of third-generation Core processors on Monday, which will be combined later this year with Windows 8, a new version of Microsoft’s operating system.

Both Intel and Microsoft beat Wall Street expectations with their earnings and appeared more optimistic about the rest of the year. Intel said it was no longer feeling the effects of the Thai floods, which inundated factories making hard drives and hit PC production.

One hard drive maker benefited the most from the shortages the disaster created. Seagate Technology saw prices of hard drives rise sharply as it was left unscathed while its main competitor Western Digital suffered factory closures due to flooding. Seagate reported this week it shipped 30 per cent more drives in the March quarter and its gross margins almost doubled to 37 per cent, compared with a year earlier.