Growth Eludes Microsoft, Intel, IBM

NEW YORK (TheStreet) -- Still stuck in the tech spending rut, three giants -- Microsoft (MSFT), Intel (INTC) and IBM (IBM) -- are wistfully watching others ride a revenue growth wave.

With third-quarter financial results rolling in, there is an emerging distinction between tech shops with big annual sales increases, and the rest of the players left behind plotting their own ascent.

Apple's (AAPL) iPhone and Mac strength made for a blowout quarter. Google (GOOG) rediscovered its search ad mojo. And Amazon (AMZN) blew past expectations with a big online retail revival.

But Microsoft, Intel and IBM -- the still dominant members of the tech brigade -- continue to see sales shrink, down 14%, 8% and 7%, respectively, from year-ago levels. This tech trio has been deftly managing costs and crossing fingers awaiting economic recovery or a big new product cycle to turn fortunes around.

Both Intel and Microsoft are banking on a big turnaround in PC sales to restart the revenue growth engine. PC makers like Dell (DELL) and Hewlett-Packard (HPQ) and contract manufacturers like Foxconn have placed big chip and Windows 7 orders to prepare a boatload of machines for the Christmas market.

Microsoft said last week it recorded the biggest quarter in sales of Windows licenses, with September being the highest single month of Windows unit sales ever.

Similarly, Intel said earlier this month that its computer processors were flying out the door in the most recent quarter, giving tech-sector watchers a boost of somewhat false confidence.

However, the actual proof of success for Intel and Microsoft will be measured in PC sales. And the obvious negative corollary to that, should the holidays not go as planned, would be a pileup of unsold computer inventory, come January.