Analyst urges selling an "ebbing" Microsoft's stock
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.
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.
Comments
Wow. Jackson Turner is going to be famous one day. (In the meantime, he'll get vilified too, I am sure).
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.
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.
All good things do come to an end.
Which is why MS will be around a long time.
Which is why MS will be around a long time.
when he hears about this.
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...
Its like an analyst recommending dropping apple stock because the amount of laptops that apple sold this quarter dropped.
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).
...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.
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
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...
Mahatma Ghandi