Microsoft wants more smartphone market share

Microsoft acquired Nokia’s devices and services unit for $7.2 billion in a transaction that closed last April.

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At the ongoing IFA event in Germany, Microsoft leveraged the fruits of this acquisition with the planned launch of three new smartphones in the coming months.

While Lumia 830 will replace Lumia 820 that was launched last year, Lumia 730 and 735 will replace Lumia 720.

All three new phones have bigger screen size, memory and better cameras compared to the predecessors.

Although the prices for these new phones have not been disclosed yet, we believe that they will be priced similar to the previous models i.e. near $200 for Lumia 730 and 735, and below $350 for Lumia 830.

In this article, we will explore how these launches fits into Microsoft’s strategy to boost its revenues.

Unlike developed countries where smartphone penetration is above 50%, it is below 25% in many developing countries.

While the adoption of smartphones in developed countries fueled the first wave of global growth, strong demand in emerging markets will drive the next phase.

Currently, the sale of sub-$200 smartphones is prevalent in emerging countries, and we believe that with the availability of smartphones offering better functionality than the existing phones, smartphone adoption and penetration can rise.

According to IDC, global smartphone shipments are on the rise and set to surpass 1.2 billion unit mark this year. 

In Q2 2014, smartphone sales edged past the 300 million mark with substantial growth in sub-$200 smartphone.

High smartphone growth is the result of a variety of factors including steep device subsidies from carriers in developed countries, as well as a growing array of sub-$200 smartphones.

Additionally, Reportbuyer.com forecasts smartphone shipments to grow to 3.9 billion by 2018.

Despite the expected increase in smartphone shipments, the expected shipment figure in emerging regions such as Asia-Pacific will be less than 50%.

We believe this presents an excellent opportunity for smartphone manufacturers that have a sizable market share in these regions.

To capitalize on this opportunity, Microsoft, which has rights to market new smartphone under Nokia’s brand name, is launching upgrades to its existing line of Lumia phones.

By doing so, Microsoft hopes to capture a bigger chunk in the highly competitive emerging markets as Nokia’s brand name is still widely recognized in these countries. Currently, Windows phones’ share in smartphone market is 2.5%. 

If Microsoft can increase its market share to 10% by launching feature rich but cheaper smartphones, which have an average cost of $130, it can generate $50 billion in revenues by 2018.

We have $44 price estimate for Microsoft, which is in line with the current market price.

Source : Forbes.com

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Microsoft to release new Lumia phones

FMicrosoft will seek to draw more people to its Internet-based services with two new mid-range smartphones it unveiled Thursday, including one designed to help people take better selfies.

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The devices are under the Lumia brand Microsoft bought from Nokia. They run the latest version of Windows Phone 8 and feature Cortana, a Siri-like voice assistant available to help with directions, calendar appointments and messages. Many of those interactions will steer users to Microsoft services such as Bing search and OneDrive storage.

Chris Weber, Microsoft's vice president for mobile devices sales, insisted consumers should feel comfortable about storing their personal pictures on OneDrive, despite the recent exposure of celebrities' private pictures stored on rival Apple's cloud-based system.

How to keep your private photos from running wild on the web
"I think we have to amplify the message around security regarding these cloud services," Weber told reporters.

To this end, Microsoft is also giving users more control over the kind of information — friends, diaries, home address — that the Cortana voice assistant will have access to, he said.

Microsoft bought Nokia's phone business in April as it seeks to boost Microsoft's Windows Phone system, which has had little traction compared with Apple's iPhones and Google's Android system. Microsoft CEO Satya Nadella has made mobile phones and Internet-based services priorities for the company as its traditional businesses — Windows and Office software installed on desktops — slow down or decline.

Microsoft unveiled the new Lumia 730 and 830 phones at the IFA technology show in Berlin.

The handsets won't have all the technical advances found in Microsoft's pricier flagship, the Lumia 930 phone, which is known as the Lumia Icon in the United States. The 730's rear camera takes 6.7 megapixel shots, while the 830 is 10 megapixels. By contrast, the 930 phone is at 20 megapixels, one of the highest in a smartphone.

Lumia Selfie app uses face-detection

But the 730, in particular, will have features designed for better selfies and video calls. The front camera used for selfies will be 5 megapixels, higher than the 2 megapixels found in the 830 and many other phones.

For even better shots, it'll be possible to take selfies with the rear camera. Users won't be able to see themselves on the screen, but an app called Lumia Selfie will use face-detection technology and beeps to guide users on where to hold the camera. Samsung's upcoming Note phones will have a similar feature, along with software to stitch multiple shots on the front camera to fit more people in.

The latest Lumia devices will also pander to users' vanity, by offering functions to make them look slimmer, brighten teeth and widen tired eyes on photos they've taken.

The 830 has a 5-inch screen, measured diagonally, and supports 4G LTE cellular networks. It will cost about 330 euros ($435) before tax, compared with 440 euros for the Samsung Galaxy S5 and 515 euros for the iPhone 5.

"We are going to challenge Apple and Samsung," said Weber. "We are going to continue to push price points lower," he added, while rejecting the idea that the phones are being sold at a loss simply to attract customers to Microsoft's operating system.

The 4.7-inch 730 will cost 199 euros ($284) before tax. It will have 3G connectivity and slots for two SIM cards, an important feature in emerging markets where wireless plans vary widely such that users switch services often to get the best deals. A 4G version will be known as the 735 and will cost 219 euros ($313) before tax. That will have just one SIM slot but support wireless charging.

Microsoft, which bought Skype three years ago, is also throwing in three months of free international voice calls with every new purchase.

The new phones will start shipping in September, though not necessarily right away in all markets. Typically, Lumia phones make it to the U.S. under different model numbers.
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Source : cbc.ca

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Windows 8 vs MS revenue

Operating income down 26 per cent as revenues slide

Microsoft is reporting a $16.03bn revenue haul in what was a decidedly down financial quarter for the company.

Overall, the Redmond giant saw its revenues drop by eight per cent over the same period last quarter, while operating income sank by 26 per cent over the same period in 2011.

The report comes just days before what Microsoft hopes will be its biggest product launch in years. Later this month the company is slated to announce the general availability of its Windows 8 operating system.

"The launch of Windows 8 is the beginning of a new era at Microsoft," said chief executive Steve Ballmer.

"Investments we've made over a number of years are now coming together to create a future of exceptional devices and services, with tremendous opportunity for our customers, developers, and partners."

The company hopes that the launch will more than make up for what was a poor quarter for its Windows and Windows Live division. The unit saw revenues weigh in at $3.24bn, down by some 33 per cent from last year.

There were, however, some bright spots for Microsoft. The company's Server and Tools business hauled in $4.65bn in revenues, up eight per cent from the previous year. That figure could improve as the company continues with its rollout of the Windows

Server 2012 platform.
Online services also performed well for Microsoft, bringing in $697m in revenues and a nine per cent growth over 2011's quarter.

The company reported that its advertising operation had managed to grow revenues by 15 per cent on the year.

Source: V3.co.uk
Tags: Microsoft , Windows 8 , Windows server
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MicroSoft New Pad

(Reuters) - Microsoft Corp's new Surface tablet looks promising, but many questions need to be answered before it can be considered a rival to Apple Inc's iPad, analysts said the day after the company made its first foray into the computer hardware business.

Surface Pad

The shares of the world's largest software company jumped almost 3 percent as Wall Street and investors welcomed Microsoft's move. But analysts had questions about the lack of enthusiasm among developers for creating applications that run on the new Windows 8 operating system and the absence of hard details on pricing and availability.

"Though pricing details are unclear... Microsoft will need to significantly undercut the iPad to be competitive," Jefferies analyst Peter Misek said.

The Surface tablet will come in two versions, one running Windows RT, based on the same chip designs that power most tablets, and a higher-performance version running the full Windows 8 Pro operating system that is designed to compete with lightweight laptops. No firm ship date was set for either.

"The most important factor in the success of a tablet is its ecosystem. Based on our discussions with developers, we find the lack of enthusiasm concerning," Misek said.

Analysts expect the slimmer Windows 8 tablet to struggle to compete with the iPad, which offers over 225,000 apps, and to a lesser extent with Google Inc's Android-based tablets, such as the Samsung's Galaxy Tab. Google, which recently bought hardware maker Motorola, is also readying its own tablet, a source familiar with the company's plans said.

Microsoft's move into manufacturing its own tablets runs the risk of alienating longtime hardware partners such as Samsung and Hewlett-Packard Co.

But analysts suggested that Microsoft's gambit is more a demonstration of what it wants to see in the market, rather than an earnest attempt to compete with its own partners.

"It's their model to show what can be achieved and lead the way and let the others ultimately participate," said Josh Olson, technology analyst for Edward Jones.

Sid Parakh, an analyst at fund firm McAdams Wright Ragen, said it was more risky for Microsoft to leave hardware development purely to the computer makers.

"Microsoft is building options," said Parakh. "They are ready to move in any direction if things don't go their way. It's basically an experiment to see if they can push the ecosystem."

It is inevitable that Microsoft will upset hardware partners somewhat, but Olson said that would likely not cause a long-term rift.

"They (PC makers) might bristle but ultimately they will have to work with Microsoft," said Olson. "They will continue to be the leading operating system maker for both enterprises and consumers. It's the nature of the beast."

Microsoft said it would only sell its devices in its 25 stores in the United States and through its online store, suggesting it does not plan to go head-to-head with other manufacturers' products at Best Buy and other stores.


UNANSWERED QUESTIONS

Microsoft excited industry watchers with the slick look of its new machines, but said little about content at its much-hyped unveiling in Los Angeles on Monday.

The company made no mention of its Xbox game and video console, which Microsoft is trying to make the center of its entertainment offerings.

"This is a great opportunity to leverage what is clearly a very loyal and established installed base and begin to migrate those consumers over to other Microsoft hardware devices while still keeping them within the Xbox live ecosystem," said Jesse Divnich, consultant and analyst at research firm EEDAR.

Microsoft also said nothing about its Skype video calling service or recent tie-up with Barnes & Noble Inc's Nook unit, but analysts expect the Surface to feature both.

"All of that is coming," said Parakh. "I would be very surprised if none of these things were on the devices. They are just natural fits."

The most striking feature of the new devices was a keyboard that doubles as the tablet cover.
"The keyboard, a simple accessory, is what makes the device most compelling, as it preserves traditional interface that we believe many users appreciate (and will demand) with the subtlety of a cover, something most users will want anyway," said Citi analyst Walter Pritchard.

Morgan Stanley's Adam Holt said the cover keyboard, compatibility with Microsoft Office, integrated USB ports and features optimized for Skype would help Microsoft differentiate itself from other tablet makers.
But selling two versions will confuse consumers, said analysts at Jefferies, Forrester Research and ThinkEquity.

"Choice is a key tenet of Windows, but too much choice is overwhelming for consumers," Forrester Research said. "Apple gets this, and limits iPad options to connectivity, storage, and black... or white."

Source: yahoo.com
Tags: Pad,Microsoft,new pad

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