Microsoft Corporation (NASDAQ:MSFT) estimated that PC demand fell by 12-15 percent year on year in the first three months of the year in the earnings report the company released yesterday. A new report from Nomura Research suggests things could get worse before they get better, and Microsoft’s exposure to the ailing PC market might be more multifaceted than most investors realize.

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Starting with trends in the desktop PC market, Windows OEM revenues were down by the same 12-15 percent estimated to represent the fall in PC demand in the first quarter of 2013. Revenues in the Windows Division as a whole were flat year on year, a worrying trend as Microsoft Corporation (NASDAQ:MSFT) tries to grow in a rapidly changing computer market.

Microsoft Corporation (NASDAQ:MSFT) relies heavily on annualized revenues from licensing of its office software. Problems with competition, most notably the online office suite offered by Google Inc. (NASDAQ:GOOG) and the change in the way computers are used may hurt the company’s sales of the software.

One way in which Office has been sold in recent years is as part of a packaged software deal on prebuilt PCs. With the advent of tablet computers, and even Microsoft Corporation (NASDAQ:MSFT) admitting that low cost tablets may be the way forward, computers with Office on board may become a thing of the past.

As Nomura points out, many tablet users have no need for Office applications, and it is not a part of the “software necessities” consumers associate with tablet computers. That trend could mean Microsoft Corporation (NASDAQ:MSFT) continues to suffer a hit to both Windows and Office revenues going forward.

One mild silver lining is the upgrades Intel Corporation (NASDAQ:INTC) is making to its processor family. The increased functionality, particularly the better battery life, might be drivers of demand in the ultrabook sector later this year, particularly if OEMs continue to cut their ultrabook prices.

Intel Corporation (NASDAQ:INTC) releases upgrades every year, however, and those improvements are unlikely to cause a reversal in the secular trend. Microsoft is going to have to deal with a slowdown in Windows sales for some time to come, unless it can make its tablet presence really known.

On today’s market, Microsoft Corporation (NASDAQ:MSFT) shares saw a bump of more than 3 percent. Nomura puts the bump down to the company’s low valuation, rather than fundamental strength. The firm still hasn’t proven it can function in the mobile world.