The Microsoft Investor is a daily report from SAI. Sign up here to receive it by email.
MSFT Up With Tech
The market was selling off after durable goods orders drop the most in three years and housing prices fall, missing expectations this morning. But stocks are recovering led by strong bank shares rising on consumer confidence. Shares of MSFT are up with the rest of tech. Upcoming catalysts include Windows 8, Windows Server 8, Office 15 and Windows Phone 8; expansion in the smartphone market with primary hardware partner Nokia; strides in cloud computing; profitability in the online business, including integration of Skype; and continued evolution of Kinect and next generation Xbox. The stock currently trades at 8.4x Enterprise Value / TTM Free Cash Flow.
Microsoft Office On The iPad Is Killing Windows (The Register)
Windows is dead. Microsoft Office killed it. Or it will, once Microsoft ports Office to the iPad. For just as porting Office to Mac OS X back in 2001 sowed the seeds of Apple’s relevance as a credible desktop alternative to Windows, so too will Microsoft’s capitulation to the iPad ensure that Windows will die even as Office takes on a new, multi-billion dollar relevance. Right now, Microsoft’s only real money in mobile comes from Android licensees. So Microsoft needs a winner in mobile, and Windows isn’t it. At least, not anytime soon. All said and done, Windows is still the number one operating system. But rivals are changing that, and quickly. In a recent survey, 68% believe iOS and Android will take over desktops as well.
Nokia Has A Long Way To Go In Selling Windows Phones (Business Insider)
Nokia leaped into first place among Windows Phone resellers last quarter. It sold 900,000 of them, according to estimates by Strategy Analytics. All other Windows Phone vendors combined sold 1.8 million. Windows Phone still has got a long way to go to reach Morgan Stanley’s estimate of 37 million phones sold this year. By way of comparison, Apple sold 37 million iPhones last quarter.
Nokia Launches The Lumia 610, Microsoft Updates Windows Phone (Ars Technica)
Nokia officially announced the Lumia 610, a budget Windows Phone handset, at the Mobile World Congress. The phone’s hardware is pretty bare-bones, but it will lead the charge for the updated, low-end-optimised Windows Phone OS that Microsoft hopes will help it conquer new territory like China. To accommodate low-end phones, Microsoft has developed an update for Windows Phone 7.5, codenamed Tango, that will run “nearly all” of the 65,000 published apps on the Windows Phone Marketplace.
Windows Phone Gets Even More ‘Affordable’ Smartphones (Beta News)
ZTE, the world’s number four smartphone maker, announced another new mid-range Windows Phone at Mobile World Congress called the ZTE Orbit. This, of course, plays into the broader post-Nokia Windows Phone strategy to bring affordable devices to even global markets. As noted above, the somewhat strict hardware guidelines Microsoft laid out initially for Windows Phone over a year ago have relaxed slightly in order to ensure that apps and downloads work correctly on lower-cost hardware.
HP Planning On Windows 8 Tablet, Whenever Windows 8 Gets Released (BusinessWeek)
Hewlett-Packard CEO Meg Whitman said the company will release a tablet computer based on Microsoft new version of its Windows software before the end of the year. The initial tablet will be based on Intel chips. It’s “not clear” when Windows 8, the update to Microsoft’s operating system, will be released for devices running chips based on ARM Holdings Plc technology, she said. Microsoft hasn’t given an official release date for Windows 8. As to how the tablet would stack up against the iPad, Whitman believe that the two tablets would not compete.