Thailand flood cause hard drive shortage

Posted on 20th Jan 2012 in News

Thailand floods 'create downturn for Microsoft profits'

Microsoft has warned over lower profit margins in the final quarter of last year due to the floods in Thailand, which continue to have a negative effect on the shipment of hard drives.

The company released a statement that stated its Windows division profits will be lower than expected after there was a one per cent decrease in the three-month period as a result of the natural disaster in the Far East.

Tami Reller, chief financial officer of the Windows unit, said last week that the tech giant was expecting a slowdown of hard drive deliveries and sales comma and that the analysts' predictions were likely to be too optimistic.

Analysts suggested that a decrease in sales was likely to carry on into this year.

Chipmaker Intel also revealed that it expected revenues for the last quarter of 2011 to drop by $1 billion (£652 million) to about $13.7 billion.

The floods that occurred in Thailand last autumn killed hundreds of people and have significantly disrupted any manufacturing industries in the country. The result of del this led to a worldwide increase in the prices of computers due to a shortage of stock.

Ranjit Atwal, PC analyst for Gartner, told the Guardian: "The bigger concern for PC vendors is the weak demand and whether ultrabooks and Windows 8 can create the compelling product to take on tablets and smartphones."

He added that the launch of proposed upcoming products and advancements in technological equipment from Microsoft and other companies could be seriously hindered by the setback experienced at the end of last year.

Set-top box manufacturer Pace also announced last year that its profits were to be significantly affected by the Thailand floods.

It predicted that its profits would be down by up to $50 million (£37.7 million) in 2012 due to the hard drive shortages.

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