Microsoft Redesigns Its Logo In Symbolic Rebranding

MSFT: Microsoft logo

Microsoft (NASDAQ:MSFT) announced a redesign of its corporate logo last Thursday. This is the first redesign in 25 years for the company, and it seeks to create a new corporate identity as Microsoft moves to its most important product cycle in recent memory.

The new pending releases of the Windows 8 OS, Windows Phone, the Surface tablet, and Office 15 are viewed as a new beginning for Microsoft by Jeffrey Meisner, a manager in the company’s brand strategy department. Below is an excerpt from a statement posted on the Microsoft Blog:

“This is an incredibly exciting year for Microsoft as we prepare to release new versions of nearly all of our products….This wave of new releases is not only a reimagining of our most popular products, but also represents a new era for Microsoft, so our logo should evolve to visually accentuate this new beginning.”

In addition to what was stated above, we think that the company is, with this redesign, attempting to visually separate itself from the image that it lacks creativity to one that will focus on usability and innovation with its new products.

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Can a new logo attract new customers?

Some of Microsoft’s products in the past have been notorious for difficulty of use and lack of innovation. We think that the news and hype that the logo change will create can get people, who would have otherwise stayed away, to at least look at or research Microsoft’s products. If these potential customers can be turned into sales, we could see an upside to Microsoft’s value.

For example, we currently estimate that Windows’ market share for PCs will decline slightly to 73% by 2019, the end of our forecast period. However, if the market share increases to approximately 80%, the change would directly impact Microsoft’s value.

In addition, even if these users do not buy a Windows PC, they might purchase a Windows phone or tablet, or an Office 15 subscription. The influx in revenues from these sales can provide additional upside to the value.

We currently have a $41 price estimate for Microsoft which is approximately 33% above the current market price. Microsoft (NASDAQ: MSFT) competes with Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG) in the tablet and operating system spaces.

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