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Microsoft predicts slower growth in sales for 2005

Microsoft's fiscal 2005 sales will be unable to keep up with the gains seen in prior years even if technology spending continues to improve, the company said in a regulatory filing.

"While we expect general economic conditions to remain stable with the improvements seen in the second half of fiscal 2004, we expect PC and server unit shipment growth rates to decline in fiscal 2005 from the high growth rates in fiscal 2004," Microsoft said in a filing on Wednesday with the US Securities and Exchange Commission.

Microsoft projected that in its 2005 fiscal year, which began on July 1, global sales of personal computers will rise between 7 percent and 9 percent, translating into revenues from the sector growing 5 percent to 7 percent.

In late July, the company predicted sales for 2005 range from US$38.4 billion to US$38.8 billion. That represents a rise of 4.3 percent to 5.4 percent from the US$36.8 billion reported for 2004.

Comparatively, Microsoft posted a rise in sales of just over 14 percent for 2004 compared to the prior year, which was up slightly from a full-year gain of 13.5 percent posted for 2003.

Aside from personal computer sales, Microsoft said its outlook could be affected by growing use of open-source software such as Linux, which is making inroads in servers and PCs.
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