360° Coverage : Can Microsoft Rise Again?

2 Updates

Can Microsoft Rise Again?

Mar 26 2014, 9:22pm CDT | by

After some early flops, Microsoft is getting its tablet strategy right. First, it came up with Surface 2, which gets the hardware-software bundle right at a competitive price. With its Windows...

Filed under: news

 
 
 

22 weeks ago

Can Microsoft Rise Again?

Mar 26 2014, 9:22pm CDT | by

After some early flops, Microsoft is getting its tablet strategy right.

First, it came up with Surface 2, which gets the hardware-software bundle right at a competitive price. With its Windows operating systems, Office Suite and keyboard, the Surface 2 has bridged the gap between laptop and tablet, catering to users who seek the full functionality of a laptop rather than a smartphone in a tablet.

Second, Microsoft entered a partnership with Best Buy to place Windows Stores at Best Buy stores.

As we wrote in previous pieces, these strategic initiatives have paid off. Late in January, Microsoft announced revenue of $24.52 billion for the quarter ending December 31, 2013. Gross margin, operating income, net income, and diluted earnings per share for the quarter were $16.24 billion, $7.97 billion, $6.56 billion, and $0.78 per share, respectively.

One notable area of improvement has been the company’s tablet segment. Surface revenue more than doubled sequentially, from $400 million in the first quarter to $893 million in the second quarter.

Wall Street has taken notice. While Apple’s stock has been trading sideways, Microsoft’s stock has regained momentum, pushing towards multi-year highs.

Now, the company is about to release a version of Microsoft Office for Apple’s iPad, which could boost Microsoft’s stock by $2 to $4 per share,according to Jefferies & Co.’s Ross MacMillan—the company reiterated a Buy rating on the shares.

But can these strategic moves help Microsoft rise again?

Probably. But they aren’t sufficient—they won’t solve the “innovator’s dilemma,” as explained by M. C. Christensen. “Successful companies want their resources to be focused on activities that address customers’ needs, that promise higher profits, that are technologically feasible, and that help them play in substantial markets,” he writes. “Yet, to expect the process that accomplishes these things also to be something like nurturing disruptive technologies—to focus resources on proposals that customers reject, that offer lower profit, that underperform existing technologies and can only be sold in insignificant markets—is akin to flapping one’s arms with wings strapped to them in an attempt to fly.”

What’s the answer to this dilemma? Cloud computing, according Barron’s Ray Tiernan.

“Office for iPad will be a good thing for Microsoft, but it won’t be the answer to the company’s future,” writes Tiernan. “Technology companies rise or fall by how they anticipate developments in the industry that can be commercialized even before people know they need them.  It happened once for Microsoft with PC, and it can happen again with cloud computing.”

The bottom line: Microsoft can rise again, provided that it focuses on radical rather than marginal innovations.

Source: Forbes Business

 
Update
2

16 hours ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforce o ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

1 day ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Essar Capital sells telecom business in Kenya for $120 million
Nairobi, Aug 30 (IANS) Essar Capital Saturday announced the signing of binding agreements with Safaricom and Airtel for the sale of its telecom business in Kenya for $120 million.
 
 
Mysteries of space dust unlocked
New York, Aug 30 (IANS) A new analysis of space dust has revealed that the cosmic particles, wich are likely to have originated from beyond our solar system, are more complex in composition and structure than previously imagined.
 
 
Global road mapping to balance development and conservation
Washington, Aug 30 (IANS) Did you know that over 25 million km of new roads will be built worldwide by 2050, encircling the earth more than 600 times? Keeping the above fact in mind, a study has created a global map for prioritising road building across the planet to balance the competing demands of development and environmental protection.
 
 
India, Japan sign Kyoto-Varanasi partnership agreement
Kyoto, Aug 30 (IANS) India and Japan Saturday signed the Kyoto-Varanasi partnership agreement, an official said.
 
 
 

Latest from the Network

Essar Capital sells telecom business in Kenya for $120 million
Nairobi, Aug 30 (IANS) Essar Capital Saturday announced the signing of binding agreements with Safaricom and Airtel for the sale of its telecom business in Kenya for $120 million. The firm, through its portfolio...
Read more on Business Balla
 
Ukrainian cargo plane crashes in Algeria
Algiers, Aug 30 (IANS) A Ukrainian cargo plane crashed Saturday in Algeria's Tamenrasset province. According to rescue officials, the crash occurred at 1.40 p.m and no survivors were found, Xinhua reported. The...
Read more on Politics Balla
 
Mysteries of space dust unlocked
New York, Aug 30 (IANS) A new analysis of space dust has revealed that the cosmic particles, wich are likely to have originated from beyond our solar system, are more complex in composition and structure than...
Read more on Apple Balla
 
Suri Cruise reunited with lost dog
Los Angeles, Aug 30 (IANS) Actors Tom Cruise and Katie Holmes' daughter Suri has reportedly been reunited with her lost dog Honey. The eight-year-old was devastated when her new Chihuahua named Honey disappeared in...
Read more on Celebrity Balla
 
Global road mapping to balance development and conservation
Washington, Aug 30 (IANS) Did you know that over 25 million km of new roads will be built worldwide by 2050, encircling the earth more than 600 times? Keeping the above fact in mind, a study has created a global map...
Read more on Apple Balla
 
Blind leaves Ajax for Man-U
The Hague, Aug 30 (IANS) Ajax and Manchester United have reached a deal for the transfer of Daley Blind to the latter, Dutch newspaper De Telegraaf and national broadcaster NOS reported Saturday. According to the...
Read more on Sport Balla
 
Tough away games for Barca, Real Madrid
Madrid, Aug 30 (IANS) FC Barcelona and Real Madrid both face testing away trips as they play their second game of the Spanish Primera Liga season Sunday. Barcelona, fresh from a comfortable and moral boosting 3-0 win...
Read more on Sport Balla
 
India, Japan sign Kyoto-Varanasi partnership agreement
Kyoto, Aug 30 (IANS) India and Japan Saturday signed the Kyoto-Varanasi partnership agreement, an official said. The partnership, which focuses on how to preserve heritage while building smart cities, was signed...
Read more on Politics Balla
 
Gremio bans fans over racist abuse
Rio de Janeiro, Aug 30 (IANS) Brazilian club Gremio have banned five fans from attending home matches after their involvement in the latest racism scandal to hit South American football. Santos goalkeeper Aranha was...
Read more on Sport Balla
 
Pato attracts Galatasaray interest
Rio de Janeiro, Aug 30 (IANS) Former AC Milan striker Alexandre Pato could be headed to Galatasaray before Monday's European transfer deadline. But the Turkish club must meet the 24-year-old's 15 million euro release...
Read more on Sport Balla