Follow us:

Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

October 15, 2012 at 7:35 AM

Sherlund: Windows 8 will have slow start but should accelerate in 2013

Nomura’s veteran Microsoft analyst Rick Sherlund expects Windows 8 to have a slow start because of initial short supply of tablets but that the new operating system will accelerate in the next year, he said in a note to investors.

Sherlund’s note comes just ahead of Microsoft’s reporting of its first quarter earnings on Thursday and of the Windows 8 launch on Oct 26.

Nomura expects quarterly revenue to be down 7 percent (plus 1% if Microsoft adds back the Windows 8 and Office 2013 related revenue deferrals), with earnings per share of 50 cents (63 cents adding back the deferrals). That’s compared to the Street at 56 cents, according to the Nomura note.

He expects the decline in PC sales — which were down about 8 percent in the previous calendar quarter — to continue to dampen enthusiasm for Microsoft shares.

On the Windows 8 front, Sherlund still expects low adoption of Windows 8 on traditional mouse/keyboard PCs and says it will take a while before the supply of Windows 8 tablets hits scale and that ultrabook touch devices will have to come down in price in order to gain mainstream adoption.

But “we expect that the issues for Microsoft will ultimately resolve favorably and Windows 8 together with Office 2013 will be perceived as a more functional device than a consumer tablet,” according to the note.

Nomura’s note also says it expects Windows 8 tablets to gain the most traction not among “pure” consumers but among enterprise users looking for more functionality, which Microsoft is attempting to offer with its integration with offerings such as SkyDrive, Skype and Yammer.

Microsoft share are currently trading at $29.35, up 15 cents.

Comments

COMMENTS

No personal attacks or insults, no hate speech, no profanity. Please keep the conversation civil and help us moderate this thread by reporting any abuse. See our Commenting FAQ.



The opinions expressed in reader comments are those of the author only, and do not reflect the opinions of The Seattle Times.


The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►