Microsoft's (NASDAQ: MSFT) new operating system, Windows 7, is set to be released on October 22, 2009, but it's unlikely to have an impact on PC prices. So, if you're feeling the urge to rush out and buy a new box, try to hold out until the end of the month. You'll get a bit more life out of it.

Fortunately, PC prices aren't expected to get much lower, so the entire supply chain -- from chips to software -- has nowhere to go but up. The effect, though, has been to put some serious pressure on manufacturers and retailers to keep from screwing up the release.

Salesforce.com (NYSE: CRM) has a new champion: Dell (NASDAQ: DELL). The PC manufacturer is promoting the online sales force-enablement platform as a way to gain access to the hefty sums available in the technology services business. The deal would give Salesforce.com access to Dell's clients in the small and medium-sized business categories. Dell would sell Salesforce.com products and provide consulting services to help clients integrate the solution with their other enterprise applications. The dollars and cents of this union weren't disclosed.

Dell sees the margins of the services business and wants a piece of the action, particularly since the PC sector is low margin. Also, sales have been hit pretty hard as a result of the financial crisis. With PCs accounting for 60% of Dell's top-line, a bit of diversity isn't a bad idea. Currently, services account for only around 10% of Dell's sales.

Dell (NASDAQ: DELL), a PC maker that competes with Hewlett-Packard (NYSE: HPQ) and Apple (NASDAQ: APPL), received an upgrade on Monday. According to Marketwatch, an analyst at Broadpoint AmTech is bullish on the company because of the possibility that corporations will perceive a need to invest in technologies to replace older systems. The analyst thinks Dell shares are a buy.

Well, Dell's stock sure has experienced a high amount of momentum this year, no question about it. The market is clearly discounting an end to the recession. If such an event is essentially in place, then it's easy to see why investors would buy Dell. Not only will businesses put cash to work to make their operations more competitively efficient, but consumers will likewise get out there and replace the laptops/desktops/printers/whatever that they've held onto for longer than usual because the effect of declining Wall Street indexes made them fearful of any big-ticket purchases. Dell should theoretically benefit from a macro recovery, since the company's brand still resonates with the PC-buying crowd.

Hewlett-Packard (NYSE: HPQ), a technology company whose colleagues include International Business Machines (NYSE: IBM), Microsoft (NYSE: MSFT), Dell (NASDAQ: DELL) and Apple (NASDAQ: AAPL), issued its third-quarter numbers on Tuesday after the bell. Relatively speaking, the results weren't bad: top-line sales dropped 2%, and adjusted earnings per share came in at 91 cents, a penny ahead of expectations, as DailyFinance reported.

Hewlett-Packard is obviously trying to keep costs and expenses under control. In fact, the company reported its adjusted operating margin went up. And its adjusted earnings per share actually increased 6% compared to last year's performance.

Apple, Inc. (NASDAQ: AAPL), the famous name behind the iPod and other nifty tech products, and a company that competes with formidable opponents such as Microsoft Corporation (NASDAQ: MSFT) and Dell (NASDAQ: DELL), issued its Q3 numbers yesterday. Once again, Apple proves itself to be a company that an investor should have owned.

According to Tom Johansmeyer's earnings preview, Apple was supposed to deliver $8.2 billion in sales and $1.16 per share in bottom-line income. It was even thought that Apple might go beyond Wall Street's estimates and make $1.32 per share. Well, investors were pretty pleased to see over $8.3 billion in sales and $1.35 per share in income. Impressive.

Dell (NASDAQ: DELL) reported first-quarter numbers earlier in the week. It wasn't an awesome report by any stretch of the imagination. On a reported basis, every important metric was down. Revenues down 23%. Earnings per share down 61%. On an adjusted basis, Dell did beat expectations by a penny, coming in at $0.24 per share.

Now, what should we make of this? Indeed, I'm in something of a tough position over Dell. I was pretty bearish on the stock back in November. I still feel bearish, to be honest. Who wouldn't? A one-penny beat in this case just doesn't encourage me. PC sales have been challenged, and as my colleague Jamie Dlugosch pointed out, Dell just can't be considered a best-of-breed company. When you think best-of-breed computer stocks these days, you probably will think of Apple (NASDAQ: AAPL) first.

Lenovo cut 450 jobs in China. A month ago, it announced larger layoffs. As demand for PCs cascades it appears hard for the Asian company to keep up by increasing cost cuts.

The news about Lenovo may be particularly bad for Dell (NASDAQ: DELL). According to the AP, "Lenovo says it has been hit harder than competitors by the global slowdown because of its reliance on corporate customers, who have cut spending more sharply than consumers." Dell's base of buyers is also tilted toward corporations, which increases the chances that it may miss earnings in the next quarter and give guidance below what Wall Street expects.

Short sellers are moving into tech stocks at a rapid pace, in many cases probably betting that falling PC sales will hurt earnings at some big companies. Based on recent data on global computer shipments, the gamble will probably pay off.

For the period ending on January 15, shares sold short in Microsoft (NASDAQ: MSFT) rose 18% to 92.4 million compared with the precious two weeks period, according to The Wall Street Journal, Shares sold short in Dell (NASDAQ: DELL) moved up 15% to 60.5 million shares.

Dell (NASDAQ: DELL), whose tech colleagues include Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Intel (NASDAQ: INTC) and Hewlett-Packard (NYSE: HPQ), had a pretty decent third quarter. The bottom line came in at $0.37 per diluted share. That represented a growth rate of 9%, and it handily beat analyst expectations of $0.31 per share according to Thomson Reuters. I give Dell credit for the significant beat.

However, it should be noted that the bottom line was driven in part by share repurchases. There's nothing necessarily wrong with that, but it does put the big earnings beat in perspective. Indeed, on a dollar basis, profits decreased about 6%. Still, operating income rose 22% on a year-over-year basis.

But then there's the statement of cash flows. Cash was used for operations in the third quarter, a reported $86 million. Last year at this time, Dell generated $998 million from operating activities. That's something to at least think about. In fact, the press release said that slowing demand helped to worsen the cash conversion cycle. Now, I won't crucify Dell on this one cash-flow statement, because the company should still deliver a lot of the green stuff on an annual basis. But even the nine-month statement shows a decline in cash from operations. Again, it's something an investor must consider, and it puts that earnings beat in perspective.

According to Moneyweb, software giant Microsoft (NASDAQ: MSFT) is hooking up with Jerry Seinfeld. No, they're not trying to revive the comedian's sitcom career (although that would be cool). It seems Microsoft is feeling a bit blah about its brand equity, so it's looking to initiate a hip advertising campaign that will tout the company's image and its powerful Windows Vista technology.

No doubt, the advertising campaign from Apple (NASDAQ: AAPL) that makes fun of the PC-Windows platform has a lot to do with it. I love those commercials, and I think it's about time Microsoft came to its senses and decided to do something serious to answer them. A campaign with Seinfeld, if done with a maximum amount of creative wit, will work wonders. But of course, that's the point -- it has to be done right. Seinfeld is a big name, and his presence carries a lot of weight with consumers.

Still, I have reservations about using him in an ad campaign. Am I the only one who wasn't impressed by his American Express commercials? I liked Seinfeld in his famous television show, but seeing him pitch charge cards didn't make me want to apply for one. I thought he was boring in the format.

Apparently, ad firm Crispin Porter + Bogusky will be doing the ads featuring Seinfeld, and they were the creative force behind the Burger King commercials with the creepy King mascot. Those commercials rock. It would be nice if the firm could do something as edgy with Seinfeld and Microsoft, but I'm not holding my breath. I'm not sure that kind of lightning could strike twice.

Most investors probably think that PC sales in the U.S. are a bit slow these days because of the recession. Now, they can sleep better because industry figures for Q2 show they are right. According to The Wall Street Journal, "Gartner Inc. said world-wide PC shipments grew 16% in the period, with U.S. shipments growing 4.2%."

The only real warning sign in the data is that units sales growth is slowing some in Asia. Dell (NASDAQ: DELL) and Hewlett-Packard (NYSE: HPQ) still have the largest market shares worldwide while Apple (NASDAQ: AAPL) shipments grew 38% in the U.S. during the period.

The important news is that Asia may not be able to make up for slowing U.S. sales growth. If formerly hot markets like China and India are not doing terribly well, the entire PC industry is in for a choppy time.

The data contradicts information from the recent Intel (NASDAQ: INTC) earnings. Not only is the company doing well, it said the rest of the year looked bright. Someone must be doing OK selling PCs and servers somewhere. The Gartner research appears to say otherwise.

For investors in PC and chip companies, it appears the information about how the industry is doing has become confused. Now they can join shareholders in almost every other sector of the market where no one seems to have a handle on what is happening.

Douglas A. McIntyre is an editor at 247wallst.com.

The choppy/consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case, and one growth company worth reviewing is Western Digital Corp.

Western Digital Corp. (NYSE: WDC) is one of largest, independent hard drive manufacturers in the world.

In general, analysts see 35%-45% revenue growth in FY 2008, reflecting the Komag acquisition, and solid PC hard drive and DVD hard drive demand.

Two pieces of news have come out of Microsoft (NASDAQ: MSFT) in the last day. One is that the software company will cut the retail price of Vista. The other is that Microsoft knew that the specs for the new operating system encouraged users with slow machines to buy the software. Redmond was aware that Vista would not run well on low-end machines.

The price cut may be a sign of weakness. Microsoft says Vista has sold well, but many people have stayed with older versions of Windows to save money and because Vista has received mixed reviews. Performance problems on inexpensive machines has probably not helped matters.

The cuts are for consumer versions of the software. According to The Wall Street Journal, "The changes are seen as a response to the falling prices of new PCs, which made the software price seem disproportionately large in comparison to that of a new system with Vista installed."

That reasoning seems a bit thin. Reaction to the OS has been lukewarm. Apple's (NASDAQ: AAPL) new operating system has received better reviews and that may be helping the Mac take market share from PCs. PC companies may well have pressured Microsoft to drop prices.

A weak product is not something that a flagging PC industry needs.

Douglas A. McIntyre is an editor at 247wallst.com.

It used to be that all tech companies wanted big footprints in the US market. Asia-based PC firms, lead by Lenovo and Acer, have been trying to get into America for years. Their efforts have been hurt by big domestic operators, especially Hewlett-Packard (NYSE: HPQ), Dell (NASDAQ: DELL), and, more recently, Apple (NASDAQ: AAPL).

Perhaps it is lucky for Lenovo that its efforts here have not worked out so well. It is set to announce profits which will be double what it did last year in the same quarter. The company should have a better year than its US rivals because of its strength in China and the rest of Asia.

"The biggest concern is the slowdown in the PC market this year, but Lenovo is best-positioned within the sector since it has the least exposure to the US market," said CLSA analyst Jenny Lai, quoted by Reuters.

The news also underscores that fact that US PC companies are still behind where they would like to be in Asia. This is especially true of Dell, which is only now making deals with retailers in the region to sell its PC.

For once, having trouble getting into the US market may be a blessing.

Douglas A. McIntyre is an editor at 247wallst.com.

With the Consumer Electronics Show (CES) in full swing this morning, yesterday's cream of the crop kickoff event featured a keynote speech from CES long-time keynoter Bill Gates, the founder of Microsoft Corp. (NASDAQ: MSFT). In his final keynote speech at the CES show before he drops his full-time gig with the world's largest software company, Gates introduced a prototype navigation device that stores photos, music and videos while also suggesting options for shopping and dining. Sounds pretty un-revolutionary for Gates' swan song, eh?

Many of Microsoft's CES introductions since 2000 have fallen flat in the real world, which is not surprising. By trying to keep customers entrenched in its proprietary Windows PC operating system, Ol' Softie puts millions of savvy consumers off its products. Now, there are many other companies guilty of this as well, but they're way better marketers -- Apple, Inc. (NASDAQ: AAPL) is the best example.

Microsoft, though, is realizing that Windows on the PC, along with its Office software franchise, can't sustain it forever. Gates told the audience that consumers want to "interact with digital devices in new ways, such as getting directions from their phones and speaking to their cars." This is true, and it's a reason why Microsoft's Sync has become a hit in some new Ford Motor Corp. (NYSE: F) cars. Now that Apple iPhone owners are interacting with data on their portable devices more than ever, Microsoft -- of course -- wants to ensure that functionality lends itself to devices that feature . . . wait for it . . . software from Microsoft as well. This really is not a new fight for the software giant. It's hard, though, to tell what is different with this version of it.