Look for Clues to Windows 8 Progress in Microsoft's Earnings Report

By Carol Kopp  JAN 24, 2013 8:50 AM

The new software is supposed to be an all-purpose vehicle for a mobile device, tablet, laptop and PC, but can Microsoft pull it off?

 


After weeks of speculation about its future, near- and long-term, Microsoft (NASDAQ:MSFT) releases its quarterly earnings report after the markets close on Jan. 24. It has got to be better than the company’s previous quarter. Seriously.
 
The report comes in the critical early stages of the company’s attempt to reinvent itself for the world that most of us already live in—the “post-PC” one, in which everybody is connected all the time, but nobody wants to be tied to a desktop when it’s not absolutely necessary and/or the boss commands it.
 
Microsoft’s plan, in a nutshell, is Windows 8, a revamped version of the operating system that the vast majority of people used until the company failed to anticipate the mobile computing revolution. The new software is supposed to be an all-purpose vehicle for a mobile device, tablet, laptop and PC or, crucially, a single device that functions as all or most of the above as needed.
 
It’s no easy goal, and we’re about to find out if Microsoft can pull it off. The company, and its stock price, have been treading water since 2001. For better or worse, that era is over.
 
The analysts’ consensus for the quarter just ended is for earnings of $0.75 per share on revenue of $21.56 billion.
 
This week, the company announced that the Microsoft Surface Pro, its own take on that multi-purpose device, will launch on Feb. 9, at a starting price of $899, plus another $120 for a keyboard. Many other companies are introducing their own versions at various prices. Walt Mossberg, the influential Wall Street Journal columnist, just reviewed contenders from Hewlett-Packard (NYSE:HPQ), Asus and Toshiba (PINK:TOSBF).
 
A less powerful version, the Microsoft Surface RT, was introduced late last year. Pending the company’s quarterly report, it’s safe to say that the RT didn’t fly off the shelves. What exactly is the point, consumers might well have asked, of a Microsoft device that doesn’t have the juice to run the usual Microsoft software like Word and Excel?
 
So, the jury is still out on the Surface and all of the other Windows 8 hybrid devices.
 
But there are two other pieces of the Windows 8 story that are critically important to the company’s success, in the quarter that just ended and the rest of this year:
It may seem excessive to harp on about Windows 8. Microsoft is a big and diverse company, with fingers in many pies. The problem is, Windows has always been the Trojan horse for most of that other stuff—the productivity software, cloud services, Bing search engine and other websites, email, and just about everything else the company makes or sells.
 
Oh, except for the Xbox. The game machine exists as a virtual mini-empire that chugs along happily all by itself. And if that’s enough to make you interested in Microsoft, you should know that there’s a hot rumor of a new Xbox 720 as early as June 2013.
Position in MSFT

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