THE MICROSOFT INVESTOR: Microsoft Admits WP7 Was In Response To The iPhone

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MSFT Up Again!
Stocks are on the rise after Alcoa numbers topped analyst expectations despite Tiffany’s cooling momentum. Shares of MSFT remain strong with the stock nearing a high of $28. Upcoming catalysts include Windows 8 next year; entrance into the tablet market; Windows Phone 7 adoption with hardware partner Nokia (see below); strides against current market leaders in cloud computing; making money in the online business, including integration of Skype and improving the search / display business; and continued evolution of Kinect and next generation Xbox. The stock currently trades at 7.6x Enterprise Value / TTM Free Cash Flow.Nokia Unveils Lumia 900 On AT&T’s LTE Network (BusinessWeek)
AT&T plans to start selling Nokia’s fast-speed smartphone, Lumia 900; its first handset running Microsoft Windows Phone software that will work on the new LTE network technology. The new device is a step in Microsoft’s plan to fight Apple and Google in the mobile-phone market and may help Nokia to revive its smartphone business in the U.S. For minute-by-minute coverage of the unveiling, click here.

Windows Phone Was In Response To The iPhone, Duh (The New York Times)
Microsoft’s head of software design for Windows Phone, Joe Belfiore, admitted that the company completely redesigned its mobile OS platform in response to Apple’s iPhone. “Apple created a sea change in the industry in terms of the kinds of things they did that were unique and highly appealing to consumers,” Belfiore said. “We wanted to respond with something that would be competitive, but not the same.” According to the interview, “once the iPhone exploded into the marketplace, Microsoft executives knew that their software, as designed, could never compete.” Well, this is what WP7 and Windows 8 will look like this year.

Microsoft To Bring Xbox Games To iOS And Android (Business Insider)
In a blow to Windows Phone 7, Microsoft will soon build apps that let iOS and Android users play its wildly popular Xbox Live games, according to a developer familiar with Microsoft’s plans. “There’s no way they’ll be ignoring those other mobile platforms,” says the source. On the one hand, the killer app for Windows Phone 7 is Xbox Live. On the other, if Microsoft makes Xbox Live the exclusive domain of Windows Phone 7, it is practically handing the live gaming market on iOS and Android to rivals.

The Brain Drain Continues At Microsoft, Server And Tools Marketing Chief Bails (ZDNet)
Corporate Vice President Robert Wahbe, a 16-year Microsoft veteran who has been leading marketing for the Server and Tools group at the company, is leaving the company mid-February. Wahbe was responsible for all product and business management for Windows Server, SQL Server, Visual Studio, System centre, and Forefront; meaning pricing, packaging, branding and advertising.

Microsoft Doesn’t Have To Worry About Apple In The Enterprise, Yet (Business Insider)
In its Global Tech Market Outlook for 2012 and 2013 report, Forrester Research predicts that by the end of the year, Apple will have nabbed $9 billion in sales of Macs to enterprises worldwide. Let’s point out that Microsoft sold over $10 billion of software to enterprises in its last quarter alone. What that means is that even though the worldwide Mac market share is growing in the enterprise, it’s not much of a threat to Windows. Yet. Worldwide Mac market share inched up to a whopping 6%, according to NetApplications, compared with Microsoft’s 92% share.

Microsoft Now Going Directly After Google In Patent Lawsuits (BusinessWeek)
Microsoft is suing Motorola in London’s High Court. Court papers didn’t give details on the content of Microsoft’s claim against Motorola but the suit was filed on December 23rd, three days after Microsoft won a ruling before the U.S. International Trade Commission over claims Android-based smartphones infringe Microsoft’s patent and two weeks after a hearing in Germany over similar claims alleged by Microsoft against Motorola. Google is buying Motorola essentially for its patents. Should get interesting.

Microsoft’s “Frisky” Stock Could See $35 This Year (Bloomberg)
Scott Redler, chief strategic officer at T3 Capital, believes Microsoft stock is acting “frisky.” The stock has had it’s biggest three day move in a long time. Redler believes that this could be a huge year for Microsoft given the dividend, liquidity, investors looking for reliable names and who don’t like the speed of a Netflix or the absolute stock price of an Apple. He believes the stock could go to about $35.