Microsoft's Windows 8 Release Candidate is on tap and analysts are busy trying to handicap the financial implications. The reality is that Windows 8 is tricky for the beancounters to model given the various wild cards with a new interface.
As noted by Mary Jo Foley, Microsoft's Release Candidate appears to be poised for lift-off. The release candidate is expected to have more features and be complete relative to the Consumer Preview in February. Windows 8 is expected to head to manufacturing in August with general availability in the fall.
While analysts who have called Windows 8 a likely disappointment have garnered headlines, most observers are a bit more on the fence about Microsoft's latest operating system. The big question is whether Microsoft has already had its stock run accounting for Windows 8 upgrades.
Here's a sampling of how the Windows 8 RC may impact Microsoft's financial picture:
- Morgan Stanley analyst Adam Holt said Microsoft is likely to display Windows 8 hardware at Computex in Taiwan June 5 to June 9. Pricing will be a big unknown, but hardware specs may encourage buzz. Typically, Microsoft shares trade higher following a Windows release candidate. Holt added:
Positive press out Computex could help investors gain comfort that Microsoft will be able to bring compelling Windows tablets to market and drive excitement around Windows 8 and new ultrabooks as well.
- Stifel Nicolaus analyst Brad Reback said in a recent research note:
We think Microsoft's next operating system, Windows 8, is a solid product, and when combined with new unique hardware, it will provide users with a viable alternative to Apple and Google devices. Although we expect Windows 8 to be a successful product, we continue to believe it will not be as strong as the Windows 7 cycle was out of the gate, due to less pent-up demand...We also believe the company’s new Metro GUI could take users a little longer to appreciate and therefore slightly impede adoption rates.
- And Indigo analyst N. Landell-Mills is decidedly pessimistic:
Much emphasis for future growth is placed on Windows 8 release with faster chips. But this unlikely to fundamentally alter the weak outlook; Microsoft faces a maturing PC market, competitive threat from Apple Macs and iPads cannibalizing PC sales.
Simply put, few observers really know how Windows 8's sales cycle will turn out. The only thing analysts agree completely about is that Windows 8 is Microsoft's best and perhaps only chance to address its tablet shortcomings.
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