Analyst urges selling an "ebbing" Microsoft's stock

[AppleInsider]

After years of financial experts considering Microsoft a safe and stable investment, one analyst now recommends that investors jump ship as Microsoft has been too sluggish responding to attacks from Apple and Google.

Jackson Turner of Argus Research switched his call on Microsoft from "buy" to "sell" on Thursday and lowered his estimates after determining that the Windows developer could no longer keep hold of the operating system market in the face of recent alternatives.

He sees the early software pioneer as having dismissed the challenges posed by newer, easier to use operating systems, especially in the handheld space where Microsoft hasn't been focusing its full attention. Windows Mobile's relative stasis for the past few years has let Apple's iPhone, Google's Android and other mobile platforms grow quickly without an appropriately serious response.

"We believe Microsoft has misjudged -- or more judiciously, has been unable to react swiftly to -- the shift towards simpler operating systems on cheaper, more portable devices, including cell phones, smart phones and netbooks," the analyst wrote.

And while it won't be a threat until the second half of 2010, Google's Chrome OS is predicted to be a likely threat in the long run by giving netbook makers a viable, simpler replacement for Windows. It's one of the few real pretenders to Microsoft's throne but is probably the "leading edge" of a larger wave of competitors that should whittle away at the company's once secure lead, Turner added.

The researcher is careful not to paint too dire a picture and insists that Microsoft should still be a very large contender if the prediction bears out. All the same, he maintains that much of the stock market has taken threats to Microsoft too lightly and that the company could see a slow, steady decline without a clear sign that it's learned its lesson.

"We believe that the [market] trend is not in the company’s favor and that many quarters of ebbing tide lay ahead," he said.

[monstrosity]

I'l second that

[echosonic]

Finally, the beginning of the end....goodbye Ballmer. You toolbag.

[anantksundaram]

"Ebbing tide .... ahead."

Wow. Jackson Turner is going to be famous one day. (In the meantime, he'll get vilified too, I am sure).

[solipsism]

MS has no threat of losing their majority dominance with their OS. Even when ChromeOS running on very simpler devices does quickly outgrow other OSes it will still maintain it’s dominance overall and in businesses for a long time to come. MS also won’t be closing its door anytime soon yet I’m sure some will interpret this article as proof of that very occurrence being right around the corner.

[JSmith]

Understand the guy isn't saying MS will die. He's telling people with money to invest that you'll get a better return elsewhere. There's a difference.

[LE Studios]

Originally Posted by solipsism

MS has no threat of losing their majority dominance with their OS. Even when ChromeOS running on very simpler devices does quickly outgrow other OSes it will still maintain it’s dominance overall and in businesses for a long time to come. MS also won’t be closing its door anytime soon yet I’m sure some will interpret this article as proof of that very occurrence being right around the corner.

All good things do come to an end.

[MacTripper]

My predicitions

Microsoft is going after the online ad revenue market with Bing, Yahoo is going down first and then Google and Microsoft will be the Pepsi and Coke of the online market with about 50/50 market share.

Google's stock will drop to half of what it is now in a few years because it will lose ad sales to companies intimidated by Microsoft.

Microsoft will (and is already) leveraging it's huge market OS share to force it's losers to use Bing.

Google's OS for netbooks? And the cloud?

People don't want to trust their programs and sensitive files to online "cloud" computing just to get a more lighter portable computer.

Perhaps Xgrid to their home desktop, that might work, but I'm sure Microsoft is working on a Windows 7 "Lite" for these future netbooks.


Google will have to make Chrome OS so much better and totally free and compatible with Windows programs in order to defeat the Redmond Beast.

Linux is free and has made some inroads into M$ market share, but it lacks from innovation and improvements, the inability to run Windows apps.

I'm all for the death of M$, but it will require a long term suicide mission from Google to serious change the brainwashed masses.

[solipsism]

Originally Posted by LE Studios

All good things do come to an end.

Which is why MS will be around a long time.

[hypoluxa]

<Burns laugh> Hehehe... Exxxcelllent! </Burns laugh>

[christopher126]

Originally Posted by solipsism

Which is why MS will be around a long time.

[Dlux]

I guess Jackson Turner is overestimating the intelligence of the average American consumer. Microsoft will produce mediocre products for a long time to come, and ill-informed people will continue to buy them. When has that never been the case?

[quinney]

I wonder what type of gymnastic moves MSFT COO Kevin Turner will perform
when he hears about this.

[aaarrrgggh]

I'd argue that since some moron of an analyst suggests selling it that it must be a great investment now!

W7 will generate significant revenue for MSFT, Office 2010 should be able to capitalize on all the people that skipped '07. For all the money-losing segments, it looks like a few of them might actually turn around-- XBox and Bing included. They have a strategy for cloud computing, which is more than I could say for Apple, and look to be one of the top-ten players in that market.

With a P/E of 14, they might actually be a pretty good investment... especially if you can get in at $22.

Now I need to take a shower... I feel dirty thinking about buying them...

[majortom1981]

Wh yin the world would an analyst recommend this when the launch of one of microsofts most sucessfull products in years?


Its like an analyst recommending dropping apple stock because the amount of laptops that apple sold this quarter dropped.

[MacTel]

Originally Posted by monstrosity

I'l second that

Me too.

If Apple gets out a subsidized netbook and when Google's Chrome OS comes out MS will see its marketshare drop like a rock.

Apple needs to drop the prices on its desktop line considerably too (i.e. iMac, Mac Pro, and Mini).

[jmadlena]

Originally Posted by MacTel

...Apple needs to drop the prices on its desktop line considerably too (i.e. iMac, Mac Pro, and Mini).

No, they don't. Apple is in the business of making money (which is does very well), not gaining market share. Apple is doing very well considering the economic climate, much better than competitors, and will most likely continue to grow at a slow but steady pace, all with out sacrificing those healthy margins investors love.

I would of course like to see Apple cut prices across their product lines, but not to the point where they have to sacrifice quality. If they can leverage new technologies, like the unibody manufacturing process, to drive down costs in the long run I'm all for it. But I don't want to see reactionary price cuts that will damage the quality of their products.

I'd actually like to see quality go up, so if they continue to create better and better products, I'm fine with paying the kinds of prices we see now.

[HCrefugee]

but..MS is innovating for the future and they will have stores next door to Apple's and everything!

[Dr Millmoss]

Originally Posted by aaarrrgggh

With a P/E of 14, they might actually be a pretty good investment... especially if you can get in at $22.

You think?

http://finance.yahoo.com/q/bc?s=MSFT...z=m&q=l&c=aapl

[lukevaxhacker]

Originally Posted by Dlux

I guess Jackson Turner is overestimating the intelligence of the average American consumer. Microsoft will produce mediocre products for a long time to come, and ill-informed people will continue to buy them. When has that never been the case?

Just like all of the boring Camrys you guys buy. My plates say it all - MAZDWGN...

[Phormic]

"First they ignore you, then they laugh at you, then they fight you, then you win."

Mahatma Ghandi

[quinney]

Originally Posted by HCrefugee

but..MS is innovating for the future and they will have stores next door to Apple's and everything!

Clearly, when this analyst finds out, he will revise his predictions.

[jwervel16]

Originally Posted by Phormic

"First they ignore you, then they laugh at you, then they fight you, then you win."

Mahatma Ghandi

Damn. I've seen some lame and inappropriate quotes pop up in forums, but this might be the most cringe-worthy. Which corporate computer vendor are you comparing to Ghandi?

[Dr Millmoss]

Originally Posted by jwervel16

Damn. I've seen some lame and inappropriate quotes pop up in forums, but this might be the most cringe-worthy. Which corporate computer vendor are you comparing to Ghandi?

I don't think he is "comparing" any company to Ghandi. I don't think that's the purpose of quoting anyone.

[solipsism]

Originally Posted by jwervel16

Damn. I've seen some lame and inappropriate quotes pop up in forums, but this might be the most cringe-worthy. Which corporate computer vendor are you comparing to Ghandi?

In regards to the iPhone and the B&M Apple Stores it actually fits pretty well.

[monstrosity]

Originally Posted by solipsism

MS has no threat of losing their majority dominance with their OS.

I disagree. Mobile OS's will knock MS off the throne pretty darn rapidly IMO. By rapidly I mean the next 4 or 5 years.
There is not much they can do about it, it is written.

[wraithofwonder]

Although I am in no position to present particulars at the moment, my gut reaction is to strongly disagree with this analyst's assessment.

One may look at my posting history, although I have said nice things about Office 2008 for Mac, I do not sing Microsoft's praises and you are all free to call me nuts...

But I just don't see Microsoft, or its stock, going down any time soon. I think that while Microsoft still has a lot to learn about how things have changed, they have learned a bit more than he would seem to believe and we'll see part of it before year's end.

[solipsism]

Originally Posted by monstrosity

I disagree. Mobile OS's will knock MS off the throne pretty darn rapidly IMO. By rapidly I mean the next 4 or 5 years.
There is not much they can do about it, it is written.

Media-rich phones with real internet access are growing and will be growing at a phenomenal rate, so if we count each OS at a on-to-one ratio then they does seem possible. However, but we really shouldn’t be considering anything but MS desktop OS to other desktop OSes and their mobile OS to other mobile OSes.

[ijoyner]

I'd hardly call Microsoft an early software pioneer - they were rather late, the foundations of software were well established long before MS came along (same applies to Apple actually) and a copier rather than pioneer.

[solipsism]

Originally Posted by ijoyner

I'd hardly call Microsoft an early software pioneer - they were rather late, the foundations of software were well established long before MS came along (same applies to Apple actually) and a copier rather than pioneer.

What do you consider early software pioneers of personal computing, which is what we are talking about. Please don’t say it’s punch cards!

[monstrosity]

Originally Posted by solipsism

However, but we really shouldn’t be considering anything but MS desktop OS to other desktop OSes and their mobile OS to other mobile OSes.

Why? they are one and the same, least they will be, the line is already blurry and it will only get blurrier.

[anantksundaram]

Originally Posted by Phormic

"First they ignore you, then they laugh at you, then they fight you, then you win."

Mahatma Ghandi

Originally Posted by jwervel16

Damn. I've seen some lame and inappropriate quotes pop up in forums, but this might be the most cringe-worthy. Which corporate computer vendor are you comparing to Ghandi?

Originally Posted by Dr Millmoss

I don't think he is "comparing" any company to Ghandi. I don't think that's the purpose of quoting anyone.

Not to sound nitpicky, but the correct spelling, and the resulting appropriate pronunciation, is Gandhi (an aspirated soft 'd' sound). It's a fairly important distinction (e.g., just as one might typically not pronounce SJ's name as, say, Stefan Jobs).

[snofoam]

if you watch actual user behavior of the average person using windows, it's kind of amazing. i was just at a two-day management offsite where the facilitator was closing antivirus notification pop-ups every 5 minutes for two days. a) the user experience sucks and b) people have a remarkably high tolerance for putting up with it. at least until they experience the alternative.

[teckstud]

Originally Posted by solipsism

In regards to the iPhone and the B&M Apple Stores it actually fits pretty well.

Only you would think that. Are you reestablishing Jonestown or an Apple facsimile of it?

[dagamer34]

I'm confused. They said Vista was a bad product but they kept calling Microsoft stock a safe bet and now with Windows 7 being arguably the biggest and most hyped release since Windows 95, they are telling people to sell the stock? ARE THEY HIGH?

I mean, I would fully understand if they were to downgrade MS stock when Vista came out, but even if you are a diehard Apple fan, you've got to realize that Microsoft is on the up and up in their core business (stuff on the side is ONLY to support their core business). Regardless if other divisions are loosing money, an investor MUST look long term if they want to come out better in the end. For example, the Entertainment Division has lost $4 BILLION dollars from the Xbox, however, they've successfully dethroned Sony as the leader in core gaming market. The Zune HD is already turning heads and it's not even released yet. Microsoft's ad campaign is the best it's had in YEARS.

Just saying, listening to people give out financial advice is probably how we got into this silly 18 month recession in the first place.

[jimerl]

Originally Posted by hypoluxa

<Burns laugh> Hehehe... Exxxcelllent! </Burns laugh>

<point>HA HA!</point>

[MJ Web]

Redmond hasn't done a single thing right since Bill Gates retired and Steve (the fratboy/Bozo) Ballmer took the helm.

I shorted MS last month and am delighted analysts are now following my put.

[Virgil-TB2]

Originally Posted by LE Studios

All good things do come to an end.

And Microsoft also.

[Virgil-TB2]

Originally Posted by dagamer34

I'm confused. They said Vista was a bad product but they kept calling Microsoft stock a safe bet and now with Windows 7 being arguably the biggest and most hyped release since Windows 95, they are telling people to sell the stock? ARE THEY HIGH?

I mean, I would fully understand if they were to downgrade MS stock when Vista came out, but even if you are a diehard Apple fan, you've got to realize that Microsoft is on the up and up in their core business (stuff on the side is ONLY to support their core business). Regardless if other divisions are loosing money, an investor MUST look long term if they want to come out better in the end. For example, the Entertainment Division has lost $4 BILLION dollars from the Xbox, however, they've successfully dethroned Sony as the leader in core gaming market. The Zune HD is already turning heads and it's not even released yet. Microsoft's ad campaign is the best it's had in YEARS.

Just saying, listening to people give out financial advice is probably how we got into this silly 18 month recession in the first place.

You don't understand the market at all.

If you wait for an obvious downturn like you say, you will already have lost some value and are in danger of losing your shirt if the downturn is rapid. What this guy is saying is that there is a long slow decline ahead and that the time to get out is now, before everyone else does. i.e. - get out *before* you lose money.

I would predict that Windows 7 will be a minor hit and the stock might even rise on that performance, but in real terms it's not going to solve any of the problems that are contributing to the long decline. Even as windows 7 is getting good reviews this Christmas, the smart money will be moving away from Microsoft at exactly that time for exactly those reasons. the following summer people will start to wonder why if Windows 7 was such a hit, that the stock is still declining, but I bet it will decline all the same.

[Quadra 610]

Microsoft hasn't been able to "react swiftly" to anything since 2001. Like, who are we kidding, they've become the budget brand of the industry. And they've done it all to themselves.

They simply don't give a sweet damn about the user experience. Never have. And we're slowly entering a reality where Microsoft will become less and less of a force in its respective markets.

It's a slow affair, like an old man easing into a bathtub. MS' licensing cash cow will still give plenty of milk for years to come.