MSFT

[Liberty]

No doubt transistor feature sizes will hit the wall at some point, but the limit is probably well below 16nm. Intel has plans to introduce 14nm chips in 2013 and 10nm chips in 2015: http://news.softpedia.com/news/Intel-Technology-Roadmap-First-14nm-chips-in-2013-10nm-in-2015-198612.shtml. Feature size shrinkage plus 3D technology should keep Moore's law going for a while yet.

 

Indeed, and by the time we're at 10nm and have 150 sixteen core processors stacked on top of each other in 3D or whatever, we might be able to use this:

 

http://en.wikipedia.org/wiki/Reversible_computing

 

To dramatically reduce energy consumption, and thus heat dissipation, allowing for much more 3D stacking and much higher clockrates.

[beerbaron]

Indeed, and by the time we're at 10nm and have 150 sixteen core processors stacked on top of each other in 3D or whatever, we might be able to use this:

 

http://en.wikipedia.org/wiki/Reversible_computing

 

To dramatically reduce energy consumption, and thus heat dissipation, allowing for much more 3D stacking and much higher clockrates.

 

Spock teleport me to the past pronto!

 

 

[Liberty]

The problem with technology is that we get used to it so fast. By the time we have something amazing, it becomes normal and nobody realizes just how amazing it is. A lot of the stuff we take for granted now would seem totally sci-fi to people from not that long ago. I'm not sure how long Moore's Law will continue, but I think we're pretty far from physical limits when it comes to making computers faster. We might need to go in different directions from what we've been doing in the past couple decades, but there's still a roadmap for that stuff.

[DCG]

I know Windows 8 is still in the very early pre-beta stages, but everyone I've talked to who has used the developer's preview have said nothing but awful things about Metro UI (the Tiles). It sounds like you'll be able to disable Metro UI, but everyone seems to say it is a confusing mess of an interface.

[StubbleJumper]

I know Windows 8 is still in the very early pre-beta stages, but everyone I've talked to who has used the developer's preview have said nothing but awful things about Metro UI (the Tiles). It sounds like you'll be able to disable Metro UI, but everyone seems to say it is a confusing mess of an interface.

 

 

I've hated several iterations of MS products, but they seem to always come pre-loaded on the computers I buy, whether I like them or not.  So to me, the real question that still remains is whether people and businesses will continue their periodic upgrades.  If people keep buying new hardware, then even a crappy OS with a crappy UI will have significant sales.

[Guest valueInv]

I know Windows 8 is still in the very early pre-beta stages, but everyone I've talked to who has used the developer's preview have said nothing but awful things about Metro UI (the Tiles). It sounds like you'll be able to disable Metro UI, but everyone seems to say it is a confusing mess of an interface.

 

lol. so "everyone" hates it? nahh. most reviewers rave about it.

 

http://news.softpedia.com/news/Nokia-Lumia-900-Wins-Best-of-CES-Award-Gets-Confirmed-for-March-246585.shtml

[QLEAP]

No more Mr. Monkey Boy

 

http://www.businessweek.com/magazine/steve-ballmer-reboots-01122012_page_1.html

[Shane]

Although that article was written to improve Ballmer's image the jury is still out for me.  He may be brilliant and enthusiastic but I feel his strategy is to catch up with Apple and copy other tech companies rather than to introduce anything innovative that would tip the scales in MSFT's favor.

[DCG]

One thing I'll give Microsoft credit for with Metro & Windows mobile is that at least it's not a blatant copy of Apple's iOS like Android is.

[Guest misterstockwell]

He may be brilliant and enthusiastic but I feel his strategy is to catch up with Apple and copy other tech companies rather than to introduce anything innovative that would tip the scales in MSFT's favor.

 

Windows Phone/Windows 8 Metro UI is totally unique and innovative. Xbox/kinect same. Those are two examples.

[Guest valueInv]

One thing I'll give Microsoft credit for with Metro & Windows mobile is that at least it's not a blatant copy of Apple's iOS like Android is.

Exactly, Microsoft has been releasing some very innovative products like Kinect and Surface. Their Metro UI takes an active tile-based approach which is very  different from the iPhone icon based approach. The Metro world takes simplicity to the extreme unlike the textured, eye candy world of the iPhone. They are completely different philosophies.

 

Google releases clones of competitive products with small changes - Android, Google+, Propeller, Google Offers and so on.

[Liberty]

Google releases clones of competitive products with small changes - Android, Google+, Propeller, Google Offers and so on.

 

That's also been Microsoft's strategy from the very start. It's certainly not a bad business.

[Parsad]

No more Mr. Monkey Boy

 

http://www.businessweek.com/magazine/steve-ballmer-reboots-01122012_page_1.html

 

Incidentally, for those haven't seen the "Monkey Boy" video (like myself), here it is...not impressive stuff!

 

http://www.youtube.com/watch?v=wvsboPUjrGc

 

This guy may need a handler!  Cheers!

[alpha231616967560]

One thing I'll give Microsoft credit for with Metro & Windows mobile is that at least it's not a blatant copy of Apple's iOS like Android is.

Exactly, Microsoft has been releasing some very innovative products like Kinect and Surface. Their Metro UI takes an active tile-based approach which is very  different from the iPhone icon based approach. The Metro world takes simplicity to the extreme unlike the textured, eye candy world of the iPhone. They are completely different philosophies.

 

Google releases clones of competitive products with small changes - Android, Google+, Propeller, Google Offers and so on.

 

Yeah this was one of the concepts that was highlighted in "Great By Choice: Uncertainty Chaos and Luck—Why Some Thrive Despite Them All" by Jim Collins - the idea was that of the company that was able to "riff" on the successful idea of another company and execute the idea better than its creator (largely by applying the other concepts in Collins' book, which is very worthwhile). Memorable examples cited in the book were Southwest Airlines, Microsoft and Apple. The companies that master this skill are at a significant advantage.

 

As a consumer, I expect Google to reproduce some version of anything attractive that their competition provides, and they seldom disappoint.

 

 

[Guest valueInv]

Google releases clones of competitive products with small changes - Android, Google+, Propeller, Google Offers and so on.

 

That's also been Microsoft's strategy from the very start. It's certainly not a bad business.

 

It certainly worked for MSFT. Whether Google can make it work for them is still up in the air.

[Guest valueInv]

One thing I'll give Microsoft credit for with Metro & Windows mobile is that at least it's not a blatant copy of Apple's iOS like Android is.

Exactly, Microsoft has been releasing some very innovative products like Kinect and Surface. Their Metro UI takes an active tile-based approach which is very  different from the iPhone icon based approach. The Metro world takes simplicity to the extreme unlike the textured, eye candy world of the iPhone. They are completely different philosophies.

 

Google releases clones of competitive products with small changes - Android, Google+, Propeller, Google Offers and so on.

 

Yeah this was one of the concepts that was highlighted in "Great By Choice: Uncertainty Chaos and Luck—Why Some Thrive Despite Them All" by Jim Collins - the idea was that of the company that was able to "riff" on the successful idea of another company and execute the idea better than its creator (largely by applying the other concepts in Collins' book, which is very worthwhile). Memorable examples cited in the book were Southwest Airlines, Microsoft and Apple. The companies that master this skill are at a significant advantage.

 

As a consumer, I expect Google to reproduce some version of anything attractive that their competition provides, and they seldom disappoint.

 

I can't comment on Southwest but MSFT introduced great business model innovation in the industry. While not much of a technology innovator, they changed the way software was developed and sold. Apple builds on other people's ideas - they don't introduce clones of competitor products. The iPhone looked and behaved completely differently from preceding smartphones even though it had many of the same features - making calls, browsing, calendars, emails, etc. I think Jobs's belief was that if they can't introduce a radical improvement, they wouldn't bother entering the market.

[vinod1]

One thing I'll give Microsoft credit for with Metro & Windows mobile is that at least it's not a blatant copy of Apple's iOS like Android is.

Exactly, Microsoft has been releasing some very innovative products like Kinect and Surface. Their Metro UI takes an active tile-based approach which is very  different from the iPhone icon based approach. The Metro world takes simplicity to the extreme unlike the textured, eye candy world of the iPhone. They are completely different philosophies.

 

Google releases clones of competitive products with small changes - Android, Google+, Propeller, Google Offers and so on.

 

Yeah this was one of the concepts that was highlighted in "Great By Choice: Uncertainty Chaos and Luck—Why Some Thrive Despite Them All" by Jim Collins - the idea was that of the company that was able to "riff" on the successful idea of another company and execute the idea better than its creator (largely by applying the other concepts in Collins' book, which is very worthwhile). Memorable examples cited in the book were Southwest Airlines, Microsoft and Apple. The companies that master this skill are at a significant advantage.

 

As a consumer, I expect Google to reproduce some version of anything attractive that their competition provides, and they seldom disappoint.

 

Off Topic: Since Jim Collins is mentioned I thought I would highlight something I read recently.

 

Jim Collins "research" has been throughly discredited as fundamentally flawed. The book "The Halo Effect" goes into this in detail. This is a pretty good book that is very helpful to investing in general and a huge time saver by helping you to recognize business books that are popular but are complete bull shit.

 

Vinod

[alpha231616967560]

I can't comment on Southwest but MSFT introduced great business model innovation in the industry. While not much of a technology innovator, they changed the way software was developed and sold. Apple builds on other people's ideas - they don't introduce clones of competitor products. The iPhone looked and behaved completely differently from preceding smartphones even though it had many of the same features - making calls, browsing, calendars, emails, etc. I think Jobs's belief was that if they can't introduce a radical improvement, they wouldn't bother entering the market.

 

I don't think that anyone would argue that Apple doesn't have innovative products. They are masters at product design and marketing. And their primary source of revenue is selling products. My point is that this isn't a critical skill for a company like Google, for which the primary source of revenue is advertising. They can contract with lesser companies than Apple to mimic Apple's products (to some degree - though Droids do mapping way better IMO) and as far as evaluating the business goes, it matters not.

 

 

 

 

 

 

[Mark Jr.]

Cringely predicts a new MSFT CEO this year:

 

http://www.cringely.com/2012/01/prediction-7-a-new-microsoft-ceo/

 

Could it be a catalyst to unlock value?

 

What if it was (as Cringely posits)...Eric Schmidt?

[A_Hamilton]

Cringely predicts a new MSFT CEO this year:

 

http://www.cringely.com/2012/01/prediction-7-a-new-microsoft-ceo/

 

Could it be a catalyst to unlock value?

 

What if it was (as Cringely posits)...Eric Schmidt?

Why would I want a change?

Income Statement - 10 Year Summary (in Millions)

            Sales      EBIT              Net Income          EPS      Tax Rate (%)

06/11 69,943.0      28,071.0    23,150.0            2.69                              17.53

06/10 62,484.0      25,013.0    18,760.0              2.1                              25.0

06/09 58,437.0      19,821.0    14,569.0            1.62                              26.5

06/08 60,420.0      23,814.0    17,681.0            1.87                              25.75

06/07 51,122.0      20,101.0    14,065.0            1.42                              30.03

06/06 44,282.0      18,262.0    12,599.0              1.2                              31.01

06/05 39,788.0      16,628.0    12,254.0            1.12                              26.31

06/04 36,835.0      12,196.0      8,168.0            0.75                              33.03

06/03 32,187.0      11,054.0      7,531.0              0.69                              31.87

06/02 28,365.0        7,875.0      5,355.0              0.48                              32.0

 

Balance Sheet - 10 Year Summary (in Millions)

  Current Assets Current Liabilities      Long Term Debt                          Shares Outstanding

06/11 108,704.0        51,621.0                  11,921.0                                              8.4 Bil

06/10 86,113.0          39,938.0                    4,939.0                                              8.7 Bil

06/09 77,888.0          38,330.0                    3,746.0                                              8.9 Bil

06/08 72,793.0          36,507.0                          0.0                                              9.2 Bil

06/07 63,171.0          32,074.0                          0.0                                              9.4 Bil

06/06 69,597.0          29,493.0                            0.0                                          10.1 Bil

06/05 70,815.0          22,700.0                            0.0                                          10.7 Bil

06/04 94,368.0          19,543.0                            0.0                                          10.9 Bil

06/03 81,732.0          16,820.0                            0.0                                          10.8 Bil

06/02 67,646.0          15,466.0                            0.0                                          10.7 Bil

 

 

[Shane]

Does anyone have any thoughts on MSFT's strategy to compete in markets where a clear dominant player already exists?  The people I am around LOVE their iPhones, my friends say "Google it" instead of search it.  I see those two businesses as highly entrenched.  Bing has been gaining market share but it is still a small player to Google globally. 

 

I don't see anything that MSFT is bringing to the table to convince people to leave the products they have a strong affection for.  I don't know much about Window's new phone, but I suggest it may be very hard to get people to part with their iPhone's.  Are they addressing any problem that apple does not address or add features that the iPhone cannot compete with?  I looked up Windows 8 phone and it appears details are lacking from MSFT on it so far, anyone have a useful link they care to share?

 

Maybe I was wrong to say they haven't done anything innovative, they just haven't done anything innovative that I have found impressive.  I don't have much confidence in their ability to compete with google in search of apple on phone's and wish they left that money to shareholders.

 

I think there is money to be made on MSFT at today's price, but I would say that is in spite of their capital allocation.

[QLEAP]

"I don't know much about Window's new phone, but I suggest it may be very hard to get people to part with their iPhone's.  Are they addressing any problem that apple does not address or add features that the iPhone cannot compete with?"

 

Shane, that probably addresses the NA/Europe mobile markets only.

 

I am yet to see the iPhone make a dent in Indian/Chinese market - it is way too overpriced where price vs value is a big factor. Samsung with Galaxy/Android platform is beating its pants off in the high end segment in India while Nokia and Chinese clones capture the lower end.

 

I think Nokia/Samsung with Windows platform will be a huge winner in India as well - a third ecosystem and an alternative choice to Android for customers.

 

Remember, China and India are the largest markets for mobile phones and MSFT is collecting license fees from Android phones also.

[Shane]

QLEAP - That makes a lot of sense, I was wrong to take a US centric view!

[Guest valueInv]

"I don't know much about Window's new phone, but I suggest it may be very hard to get people to part with their iPhone's.  Are they addressing any problem that apple does not address or add features that the iPhone cannot compete with?"

 

Shane, that probably addresses the NA/Europe mobile markets only.

 

I am yet to see the iPhone make a dent in Indian/Chinese market - it is way too overpriced where price vs value is a big factor. Samsung with Galaxy/Android platform is beating its pants off in the high end segment in India while Nokia and Chinese clones capture the lower end.

 

I think Nokia/Samsung with Windows platform will be a huge winner in India as well - a third ecosystem and an alternative choice to Android for customers.

 

Remember, China and India are the largest markets for mobile phones and MSFT is collecting license fees from Android phones also.

 

China is Apple's largest market after the US. It is a huge success despite being available only on the 2nd largest operator network. There was such a crowd at teh 4S launch that Apple had to stop selling the phones at its stores. Apple is in talks with the largest carrier (China Mobile, I think) to offer the iPhone later this year.

[Guest valueInv]

Does anyone have any thoughts on MSFT's strategy to compete in markets where a clear dominant player already exists?  The people I am around LOVE their iPhones, my friends say "Google it" instead of search it.  I see those two businesses as highly entrenched.  Bing has been gaining market share but it is still a small player to Google globally. 

 

I don't see anything that MSFT is bringing to the table to convince people to leave the products they have a strong affection for.  I don't know much about Window's new phone, but I suggest it may be very hard to get people to part with their iPhone's.  Are they addressing any problem that apple does not address or add features that the iPhone cannot compete with?  I looked up Windows 8 phone and it appears details are lacking from MSFT on it so far, anyone have a useful link they care to share?

 

Maybe I was wrong to say they haven't done anything innovative, they just haven't done anything innovative that I have found impressive.  I don't have much confidence in their ability to compete with google in search of apple on phone's and wish they left that money to shareholders.

 

I think there is money to be made on MSFT at today's price, but I would say that is in spite of their capital allocation.

 

Here's my thinking on MSFT. At current prices, you get a sold business for very cheap. While their moat is eroding, it is doing so very slowly giving you a margin for safety umbrella for some time.

 

The stock provides from speculative upsides dependent on MSFT's ability to capitalize opportunities in the following areas:

 

Smartphones

I think the MSFT have a competitive product, but they need to sell.

 

1, The Operator Factor : iPhones have high satisfaction ratings, Android phones do not. There are fanboy camps for both phones but a large portion of the market is not tech savvy and do not have strong preferences. They typically walk into an ATT or Verizon store and ask the salesperson which phone they should buy. In the US, the operators heavily influence what phones people buy. They usually push Android because of more revenue streams (cut of ad and app sales revenue) and lower subsidy costs. They also are less disintermediated with Android. Android did not take off in the US until Verizon started pushing Droid with a $100M campaign.

 

Operators want fragmentation, it gives them more bargaining power. They want Windows phones to remain a player for higher market fragmentation. MSFT is also offering cash incentives to sales people at operator stores that should help push the large undecided population towards Windows. There is also a section of highly price sensitive customers that can be won over with incentives which Apple is not willing to provide. 

 

As RIM screws up, it creates an opening in the business segment of the market. Neither Google nor Apple are focusing on it right now. MSFT can leverage its incumbency in the enterprise to gain marketshare.

 

2, The Nokia Factor

Nokia still has a lot of brand power in Europe and Asia but until recently they did not have a competitive OS or a coherent strategy. Now they do - they have tied their fate to Windows. This will help in get traction in those regions.

 

The Living Room

MSFT is the leader here with XBox and Kinect. They have the ability to reach the most customers to sell them movies, etc. They can capitalize on this further as smart devices get traction in the living room.

 

Search

I think Google and Bing are fairly equal when it comes to search results. However, Google has a huge mindshare advantage. If Bing were to gain critical mass, the game completely changes.

 

1, The Social Factor

Google is distracted with social networking - its their number one priority. They have even made employee bonuses dependent on the success of their social networking efforts. This means they have taken their eye off search in the short term. Their strategy is

to weave social networking into all their products including search. This dilutes their other products and makes them more complex. Witness the backlash they are facing since they introduced Google+ results into their search product.

2, The Smartphone Factor

If you believe that mobile is the future of search, then the future is wide open. Despite heavy sales of Android devices, two thirds of Google's mobile searches come from iPhones. What happens if MSFT wins the next contract with Apple and the default search engine is switched to Bing? If Windows phones gain significant marketshare, Bing gains. Bing can even gain on Android since Google has little control over what the operator sets as the default search engine. For example, afaik, Bing is the default search engine on Android phones sold on Verizon. I'm guessing Bing will gain more marketshare in 2012.

 

Let's hope they are able to take advantage of these openings in the market.