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MSFT Flat In Sideways Market
The markets are mixed this morning coming off of three days of solid gains. Crude oil, a major source of volatility for the market since February, is dipping below the $103 level. The ongoing crisis in Japan and the fighting in Libya are also contributing factors to the fluctuating market today. Shares of MSFT are relatively flat in early trading. Upcoming catalysts include any entrance in the tablet market; Windows Phone 7 adoption with new partner Nokia; strides against current market leaders in cloud computing; gaining search market share with Bing / Yahoo! partnership (see below); and continued momentum of Kinect. The stock currently trades at 8x Enterprise Value / TTM Free Cash Flow, inexpensive compared to historical trading multiples.
Microsoft Getting Picky With Mobile Phones (The Wall Street Journal)
ZTE’s UK mobile division head Wu Sa hinted that his company had been shot down by Microsoft for trying to make too cheap a Windows Phone 7 device; Microsoft hasn’t been happy with the speed. While ZTE may not be a company with high brand recognition among consumers, it holds a top five spot in the world mobile phone rankings. The company not only produces low-cost handsets for developing markets, increasingly an area of Microsoft’s focus with its new partners Nokia, but OEM devices rebadged by carriers. It’s a good sign Microsoft is focusing on quality if it’s going to go up against Google and Apple.
The Desperation Gets Worse; Going After Barnes & Noble (Various via techDygest)
Microsoft filed lawsuits for patent infringement against Barnes & Noble over its Nook electronic book reader, alleging that the company and its device manufacturers (Foxconn and Invantec) have violated patents related to functionality embedded in the Android OS devices. The move means that any company who uses Android in any capacity faces a legal threat from Microsoft. Microsoft is probably on solid legal ground here. Android includes Linux at its core, and Microsoft established years ago that it thinks Linux infringes its patents. Read more from Matt Rosoff at Business Insider.
Xbox 360 Replacement Coming In 2015 (ZDNet)
Microsoft could be looking to a 2015 replacement date for the Xbox 360, according to the personal portfolio of a designer working with the company. Ben Peterson was brought on in March 2011 to working with the Interactive Entertainment Business (IEB) Design group on “investigating future user experiences and hardware for 2015.” We can glean from the noted March 2011 date that this is a completely new project just getting underway. Read more at Business Insider.