Microsoft‘s (NASDAQ:MSFT) stock gyrated slightly higher the last couple of weeks. Its slated to announce its earnings for Q2 FY12 on January 19, 2012. We will be following the results and related announcements in the earnings call closely. There have been some significant developments related to Microsoft in these weeks, which could impact its stock price going forward. Windows accounts for a significant portion of Microsoft’s overall revenues, and almost 25% of its Trefis price estimate. Xbox, Windows Phone and other entertainment devices account for around 8%. It competes primarily with Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG).
We currently have a $32 Trefis price estimate for Microsoft, which stands nearly 20% above its current market price.
Check out our complete analysis for Microsoft
Windows
2012 will be a crucial year for Microsoft. We expect it to launch the next version of Windows – Windows 8 – in mid-2012. It is probably the most important release for Microsoft in recent times. We expect revenue from the Windows division to show a significant jump following the launch.
With Windows 8, Microsoft will also enter the tablet market, which is currently dominated by Apple. We also expect an increase in notebook sales, thanks to the launch of Intel’s new Ultrabooks by several manufacturers. This should compensate for the slowdown in desktop sales, and help Windows 8 sell many more copies than Windows 7, which has itself sold more than 500 million licenses to date.
Xbox
Microsoft continues to upgrade the Xbox Live online gaming network with new features and more content. It has launched a new update which brings a lot of new features to Xbox Live and aims to transform the Xbox 360 into a complete entertainment hub, with games, movies, TV shows, music and sports content.
Rumors also suggest that Microsoft could announce the next version of the Xbox console – the Xbox 720 – at CES 2012. This could lead to a significant jump in revenue from its Entertainment and Devices division in the following quarters.
Windows Phone
Microsoft continues to push forward with Windows Phone. It is desperately trying to gain a foothold in the smartphone market which has been cornered by Apple’s iOS and Google’s Android.
Windows Phone now offers more than 50,000 apps, which should help sales going forward. Microsoft is also ramping up its marketing spend, and working to make cheaper devices to gain market share. 2012 will be a make-or-break year for Microsoft, as far as Windows Phone is concerned.
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