This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Microsoft Surface Event: What to Expect

NEW YORK (TheStreet) -- Microsoft (MSFT - Get Report) is hosting an event next week in New York related to the Surface tablet, and while there hasn't been much in the way of leaks and details, there's talk that the tech giant could launch an iPad-mini competitor as it continues to grow under new CEO Satya Nadella.

FBR Capital Markets analyst Dan Ives, who rates shares "market perform" with a $43 price target, believes that a Surface-mini would allow Microsoft to compete in the tablet space alongside the likes of Apple (AAPL - Get Report) and Samsung, as the PC market stays weak.

"We believe rolling out a smaller form factor for the Surface will be an uphill battle versus the likes of Samsung and Apple, as Microsoft has been late to the game on the tablet front, and Surface's impact has been underwhelming thus far," Ives wrote in the note. "That said, we believe Nadella continues to lay the seeds for growth, and we look forward to hearing more details around Microsoft's tablet offerings at the event."

Microsoft shares were lower in Thursday trading, falling 1.3% to $39.70.

Must Read: Google's CEO Larry Page Outlines Grand Ambitions

Ives stated that investors will be looking to see how the Surface relates to the company's cloud and mobile strategy, particularly getting the company's core enterprise software, Microsoft Office and subsequently Office 365, in the hands of more users. "Overall, we believe the Nadella era is off to a golden start with his Office for iPad announcement, improved transparency, and strategic focus on the cloud. While gaining share on the tablet market continues to be a "prove-me" situation, the Street (including ourselves) has become incrementally positive on Nadella's modus operandi around driving cloud/mobile growth outside the challenged PC arena."

Nadella announced Office for iPad at an event in San Francisco in late March. Since then, select Office apps have been among the top free apps on the App Store. Currently, Microsoft Word for iPad is the #2 free app on the App Store, while Excel is #13 and Powerpoint is #16. In the productivity category on the App Store, Word is #1, while Excel and Powerpoint are #3 and #4, respectively.

Aside from Office, the other big revenue driver for Microsoft is Windows, so Ives and investors will be looking to see whether Nadella has any comments on how to reinvigorate the Windows franchise, now that Microsoft has killed support for Microsoft XP, forcing consumers to upgrade.

"Reinvigorating the Windows franchise continues to be a key ingredient in Microsoft's recipe for success as it looks to offset headwinds from the secular challenges in the PC market, in our view," Ives said in a note. "That said, we believe investors remain laser-focused on any hints/previews around Windows 9, as Windows 8 (and subsequent updates) has struggled to gain significant traction for this high-margin business. With the recently announced offering of Windows for free on mobile devices (screens under nine inches), we believe Microsoft continues to look for ways to 'spread the gospel' around Windows on mobile while laying the groundwork for a flagship cloud-centric platform."

Also See: Microsoft's Surface Mini May Give New Life to Windows RT

Also See: Microsoft Unveils Office for iPad

--Written by Chris Ciaccia in New York

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $109.50 -1.16%
MSFT $47.45 1.40%
FB $92.47 0.08%
GOOG $638.31 -0.63%
TSLA $226.00 -2.60%


Chart of I:DJI
DOW 17,050.75 +138.46 0.82%
S&P 500 1,995.83 +15.91 0.80%
NASDAQ 4,810.7880 +19.6360 0.41%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs