Citigroup, Caris: Microsoft not too late for tablet party

“Microsoft is still not too late for the tablet party. And with its Next operating system closer than most expect, the software maker could corner meaningful market share in 2013 and beyond, Citigroup said,” Unnikrishnan Nair and Rachana Khanzode report for Reuters. “Microsoft could bring out a tablet-optimized version of Windows Next OS before it releases a PC version, the brokerage said in a note to clients. Citigroup analysts expect the beta version of the operating system by September and shipping to start between January 2012 and March 2013.”

“However, Citigroup was not convinced the product will be a raving success, adding that the overwhelming investor sentiment is Windows Next will not improve Microsoft’s position in the consumer devices market,” Khanzode report. “Apple Inc shipped roughly 15 million iPads in 2010, accounting for nearly the total tablet market, Citigroup said.”

‘Microsoft can have a meaningful share of the market in 2013 and beyond. Of course this is dependent upon the company’s ability to deliver a competitive operating system on partner hardware that is priced competitively,’ Citigroup said. Microsoft would have the enterprise market in its favor if tablets pick up with business users, as these customers are accustomed to Windows devices.”

Read more in the full article here.

Tiernan Ray reports for Barron’s, “Caris & Co. analyst Sandeep Aggarwal this morning reiterates a Buy rating on shares of Microsoft , writing that a sooner-than-expected introduction of a Windows-based tablet from Redmond could be a catalyst for the stock… ‘We believe that the company has made big strides over the past 6 months and may end-up launching tablet soon.’ It’s understandable if Microsoft was late to the game, writes Aggarwal, given a likely reluctance to cannibalize its own PC Windows sales, says Aggarwal.”

Ray reports, “But once Microsoft does decide to offer Windows for tablets, they have the advantage, he thinks, in that, ‘unlike mobile devices, computing devices including tablets have higher switching costs in favor of Microsoft (familiarity of Windows & other computing products) and Microsoft can prevail even if it is a late entrant.'”

Read more in the full article here.

MacDailyNews Take: Citigroup is right to be skeptical and, from the sound of it, Aggarwal has very little, if any, meaningful understanding of tablets like iPad and, therefore, doesn’t understand the tablet market much at all.

33 Comments

    1. They wrote about hardware and the OS being ready “between January 2012 and March 2013.” They never considered the hole package. When would the hundreds of thousands of apps be ready along with an iTunes like online distribution system. Remember the Dancing Monkey, “Developers, developers, developers, developers, developers, …”? We are talking (in there dreams) about Microsoft having an iKiller tablet in 2013 to 2015!

      THIS GAME IS ALREADY OVER BALLMER!

  1. It is actually a rule already that you can not become “Wall Street analyst” unless you are short-sighted, ignorant and, simultaneously, stupid enough to not understand it.

  2. Problem is that IT departments in many companies still dinosaurs and they are stick to microsoft no matter what.
    If microsoft finally gets its tablets, I bet you that there will be tons of ignorants IT managers imposing those devices to their employees.
    Remember that Apple open its space in the office because of smart people buying its own devices and they getting authorization to use it in the office. Microsoft and crap berry products are usually impose by the manager.. sadly

    1. I think it’s getting to the point that Apple has so many iOS devices in the hands of end users that IT can’t force feed us MS stuff like they used to. I’m seeing die-hard PC users requesting Macs from IT. One of our IT guys who had been anti-Mac for years is now running a MBPro as his main machine. Why? He loves his iPhone.

      1. I completely agree with you, i trashed the BB that my office gave me and I’m using my personal iPhone with my own data plan. But even that IT allow us to use iPhones, they corporate offices still imposing the BB. I mean, they may be allow us to bring our iPhones, but they still imposing the crap berry and I don’t see them imposing iPhones. Ironic that “solutions” companies are the still trap in the windows and crapberry world.

  3. Citigroup should stick to repaying TARP money and not make prognostications of the tablet market of which they know nothing. Microsoft tablet is as of now not even in conceptual pre-alpha phase of development. So how can you predict based on non-extant technology is beyond me. Market conditions can change in the blink of an eye much less 18 months out.

    1. Microsoft threw the party; problem was, nobody wanted to come. Then MS forgot what the party was about, and now they can’t find their invitation.

    2. Dude, Apple was researching & promoting a “Tablet” in 1987. Also they PRODUCED the Newton Tablet with hand writing recognition technology in the 1990’s BEFORE Palm PDAs & Before MS Faux Laptop flip-top “tablet”. WATCH this video for proof.

  4. The iPad is really showing the masses how Apple brings things to market first and gets copied (poorly).

    Unfortunately the iPhone still seems to have went over people’s heads as far as the overall design and UI go. The Mac vs. Windows thing is simply too old of a debate for most people to even think about. The iPod’s total dominance didn’t really leave room for copycats, making iPod the common term for “MP3 Player”.

    It seems only now people are really starting to understand what Apple does. In my opinion, you have to be crazy to get a tablet other that the iPad.

  5. 1. “Windows NeXT” – are they kidding?

    2. Apple took 6 years to develop iOS before releasing it, Google took 4 for Android I believe, and MS will do it in 2?

    3. It is the Apps that make the platform and MS will be starting from zero. Just because it is called ‘Windows …” doesn’t mean it will run legacy apps. Office will be crippled to run on a tablet, just like iWork.

    4. Do MS think Apple and Google will be standing still?

    5. The current WM7 phones will be totally incompatible with the new OS, leading to the PFS, Zune scenario where early adopters get burned and never buy another.

    6. MS-based IT professionals couldn’t care less about tablets. They haven’t for 10 years so why start now.

    7. MS have 95% of the enterprise. Either this remains as it is or it goes down. It sure isn’t going up.

    8. It is never over to reenter a market as Apple shows, but you have to be much cheaper (Android) or much better (iOS).

  6. “But once Microsoft does decide to offer Windows for tablets, they have the advantage…”

    I thought they did this years ago, and where did that get them? Seems to me if people wanted Windows on tablets then their earlier offerings would have amounted to at least something.

    1. Exactly, Windows POS tablets have been around forever. They used one this year at my annual fire inspection. It took the guy longer to input my information than the actual inspection took. Then, it wouldn’t print, so they had to do it on a regular form. I told the guy it may be time to get someone to design an app for the iPad. 🙂

  7. “But once Microsoft does decide to offer Windows for tablets, they have the advantage”

    Wrong. Purchasing a tablet is not like a consumer deciding to purchase a new PC. One of the key driving motivations for people to choose Windows over Mac way back when was that they wanted to run the same software at home as they did at work, and the familiarity with the OS. Plus, after awhile Windows had a significant advantage in number of applications available, games, etc. that the Mac did not.

    Mobile devices are completely different. First, the OS is not the same as the one you use at work (unless you have an iPad at work). Apple has such a vast head start in apps that looking at Windows Marketplace is laughable. So those points of consideration completely favor Apple.

    Windows Next for tablets is not going to have the same functionality or look-and-feel of Windows, especially not the Windows versions people are currently used to (XP, Vista, 7). They will have to buy new apps to run on a Windows Next tablet (if they can find any), and let’s not forget, it’s still going to be made by Microsoft. Even many Windows users don’t like Windows, they just use it because they’re too scared to switch or too cheap to buy new software.

  8. Hey, Microsoft was first to tout a tablet 10 years back. They gave the idea to Steve Jobs (again after the Newton).

    MS is not too late to the party. They are just going to have fight to the death to pick up crumbs left over at the party so they can make the cake.

    If MS is going to be a significant player, my bet is it takes 5-10 years, and by then Apple will still be ahead.

    1. Speaking of delusions.

      The headline of this MDN article is a big delusion.

      Consumer mindshare is NOT positive towards Microsoft. That is one of the major obstacles to getting a foothold on tablets.

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