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MSFT Choppy With Tech
Markets are bouncing around in early trading as Spain releases awful numbers while both the Chicago PMI and housing prices beat expectations. Shares of MSFT are on track to rebound from morning lows. Catalysts for the stock include Windows 8, Windows Server 8, Office 15 and Windows Phone 8; expansion in the smartphone and tablet markets; strides in cloud computing; profitability in the online business; and continued evolution of Kinect and next generation Xbox. The stock currently trades at 6.7x Enterprise Value / TTM Free Cash Flow.
Does Microsoft Finally Know What It’s Doing? (MacDailyNews)
Microsoft is in a very unique position these days, caught between alarming dismay and customer delight. Microsoft must’ve read the very first positive review of Windows Phone and immediately started creating Metro. But what to do with their legacy, Windows? Just throw it in. Lately Microsoft has gone on the record basically saying one OS for all your devices is better than specialised operating systems for your many. They can’t believe that. For once Microsoft is doing their own thing, they’re still, albeit subtly, reading from Apple’s playbook. Their plan appears silly to the untrained eye, but looking closer you can see it’s a simple copy of one of Apple’s greats plays, the ‘halo’ effect.
Microsoft’s New Business Model Is Hiding In Plain Sight (ZDNet)
This is a worthwhile read. Microsoft is re-imagining its entire business model, and they’ve laid out the details for anyone to inspect. You just have to read between the boilerplate sections in the company’s most recent 10-K. In the “Risk Factors” section of its 2011 10-K, Microsoft used the word services 44 times. In this year’s revision, the word appears 73 times. That attests to the transition to cloud services. The word devices appears 11 times in the “Risk Factors” section of the 2011 10-K. It appears 25 times in the equivalent section this year. The word hardware appears 8 times in the same section of the 2011 10-K. You’ll find 15 references to hardware in this year’s report. We could see more hardware from Microsoft.
Microsoft Admits Risks In Tablet Plan (The New York Times)
Microsoft finally conceded something that has been rather obvious to anyone with a rudimentary understanding of the personal computer industry and Microsoft’s historical role in it. On page 14 of the company’s most recent SEC filing, Microsoft acknowledges that its Surface family of tablet computers could weaken support for Windows among Microsoft’s partners in the PC industry, known as original equipment manufacturers, or OEMs for short. Specifically, “our Surface devices will compete with products made by our OEM partners, which may affect their commitment to our platform.” Competing with your customers is a delicate matter.
Windows Phone Had A Big July In Europe (WMPoweruser via The Next Web)
Attempting to track the success of Windows Phone is a difficult endeavour, as Microsoft is determined to remain recalcitrant in regards to handsets sales for its mobile line. WMPowerUser, a publication that tracks Microsoft’s mobile efforts closely in the EU, noted that in its most recent month, Windows Phone had a massive July, moving from 1.36% to 1.68%, a jump of roughly 23.5%. In Germany Windows Phone installed base grew 27% in July, and in France 29%, while UK saw 18% month on month growth.
Microsoft Might Have Created A True Hybrid (ZDNet)
Until Mary Jo Foley saw the Microsoft Surface, she thought Windows 8 was going to be a disaster. She believed, and still does, that without hardware designed to simplify the use of Windows 8, Microsoft’s next-gen operating system faced a rough road. Microsoft made an operating system design choice with Windows 8: It decided to straddle the fence and offer something that company officials believed would be equally at home on PCs as on tablets. But, if the Surface actually works as promised, Microsoft will have created a true hybrid.