Unless Sinofsky's exit was step one in a Bill Gates' master plan nobody knows about, Ballmer's not going anywhere, even if shareholders raise hell.
With the stock unable to hold $30 when it had the chance on a slight whiff of Windows 8 euphoria, MSFT shareholders have a choice of three positions: Get out, be happy with an increasing dividend yield on a dying stock or put your faith in Ballmer.Loyalty vis-a-vis an investment is a dumb concept. Given the obstacles Microsoft faces, faith will not be rewarded.
PC Confusion and Tablet AdoptionBarclays, via Forbes, anticipates PC sales and demand to swoon precipitously "for years to come." The firm has legitimate answers for the lame defenses PC and MSFT bulls use to make a case. It's all so reminiscent of what happened last year with Research in Motion (RIMM). The same thing is happening right now with Intel (INTC - Get Report). Just like RIM bulls defended with The enterprise won't leave RIM because of security line, MSFT ardents speak of "replacement cycles" and emerging markets growth. Barclays squashes that nonsense with reasonable offshoots of smartphone and tablet -- particularly iPhone and iPad -- PC cannibalization. Businesses will move more slowly to replace PC accoutrements because they're diverting resources to mobile initiatives. They're also embracing tablets (in lieu of PCs) at a rapid pace. And, in emerging markets, consumers will adopt smartphones and tablets earlier in the cycle than Americans did causing them to fall far short of the 100% penetration per person in the U.S.
Retail PresenceMicrosoft should be embarrassed by its retail presence. I'm not sure how Steve Ballmer can show his face in public after knocking off Apple's (AAPL - Get Report) design and failing miserably in the process. Relatively speaking, Microsoft stores are a waste of space. According to RetailSales, Apple ranks number one among over 200 chains across 15 sectors with sales of $6,050 per square foot. That's double No. 2 Tiffany & Co. (TIF) ($3,017) and way ahead of a gaggle of strong others, including Lululemon (LULU) (No. 3 at $1,936) and Coach (COH) (No. 4 at $1,871).
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