Most Important Business Stories: Microsoft Windows Woes, GM in China

Markets across the world continue sharp drops on concerns about regional recessions, slow growth in formerly fast-growing regions and worries that rising rates will undercut the value of equities. Today, the major culprits were a drop in China’s PMI and PMI data from Europe, which were slightly better than expected but still depressing. China’s PMI data and the value of the yen helped press the Nikkei down 3.72%. The report on the EU27 weighed on stocks there. U.K. stocks continued a four-week downturn. The FTSE, DAX and CAC 40 were off between 0.4% and 0.7%. According to MarketWatch:

European stock markets opened with broad-based losses on Monday, after a data release on Chinese manufacturing showed the sector contracted more than initially estimated in May. The final version of HSBC’s Purchasing Managers’ Index fell to 49.2 from a preliminary reading of 49.6. Meanwhile, the official version of the PMI rose to 50.8 from 50.6. Asian stock markets dropped, further adding pressure on European equities.

Microsoft Windows Woes

Microsoft Corp. (NASDAQ: MSFT) has thrown in the towel in the portable device market, as it drops its price on Windows RT. The company has continued to struggle with the legacy Windows products for PCs, and it will put out an 8.1 versions to help address some customer objections to its new interface. The portable problem is much more vexing. It is critical that Microsoft take market share from Apple Inc. (NASDAQ: AAPL) and Google Inc.’s (NASDAQ: GOOG) Android, which continue to grow. Android in particular has taken the lead and its app stores, critical to customer loyalty, and may soon pass Apple’s in terms of downloads. According to Bloomberg:

Microsoft Corp. is cutting the price of its Windows software for small tablets, seeking to shore up foundering efforts to combat Apple Inc in the mobile-computing market, people with knowledge of the matter said.

Microsoft is using the changes to try and get more manufacturers to adopt Windows RT, a version of its flagship software for tablets, said the people, who asked not to be identified because pricing is confidential. The price cuts affect Windows RT for small-sized tablets.

A year after unveiling the first Windows RT machines aimed at eroding Apple and Google Inc. lead in the $64 billion tablet market, Redmond, Washington-based Microsoft is struggling. Global device makers such as Hewlett-Packard Co. and HTC Corp. are shunning the system, leaving a dearth of RT machines in stores and giving Windows RT less than a percentage point of market share in the first quarter, compared with 40 percent for Apple, according to IDC.

General Motors in China

General Motors Co. (NYSE: GM) will use its huge position in China’s car manufacturing industry to press into emerging markets. GM is the largest U.S. car company in the People’s Republic, as measured by market share. According to Reuters:

General Motors Co, the biggest foreign automaker be sales in China, aims to boost its exports from the country by nearly 70 percent this year because of strong demand for its Chinese-developed low-cost cars, a local executive said.

The U.S. automaker plans to export as many as 130,000 China-made vehicles this year, up from 77,000 vehicles in 2012, driven by demand for its Chevrolet Sail in other emerging markets.

“While GM’s primary philosophy is to manufacture where it sells, we find that product exports are necessary to meet global market demands when GM does not have local manufacturing capabilities for a particular vehicle,” Bob Socia, the head of GM in China, told Reuters in an email.