Note: Most links below will take you to Trefis' Web site NEW YORK ( Trefis) -- Microsoft ( MSFT) will announce its Q3 FY12 earnings on July 19. This year is going to be a crucial year for Microsoft as it will see the launch of Windows 8, the beta launch of Office 15, and decide the fate of Windows Phone, which has hardly seen any significant traction since launch despite Microsoft's best efforts. We could also see the transformation of the Xbox + Kinect combo into the ultimate home entertainment device this year and some details about the Xbox 720, which is expected to be launched in 2013. In this earnings call, the focus will be primarily on Windows, Xbox and Windows Phone. We also expect the launch of the Surface tablets to boost Microsoft's chances in the tablet market. Microsoft competes primarily with Apple's ( AAPL) Mac OS X in the operating system space, Google's ( GOOG) Android and Apple's iOS in the smartphone space, and Google Docs in productivity software. Check out our complete analysis of Microsoft
Windows sales have been flat in the last couple of quarters, as Windows 7 was launched more than two years ago, and customers stall purchases for Windows 8, which is expected to be launched soon. We expect Windows sales to be flat in the last quarter as well, or even show a slight decline, but show a massive jump following the launch of Windows 8, which has received rave reviews so far, and will serve three huge markets: Desktops, notebooks and the rapidly expanding tablet market. The launch of the Surface tablet could provide a very positive impact to Windows 8 sales in the tablet space.
Office is Microsoft's most valuable business, which showed modest growth in the last quarter. Though Microsoft unveiled the Technical Preview of Office 15, the final version will be launched only in 2013, which could lead to a slowdown in the sales of the Office suite in the coming quarters. Operating margins for Office may also be squeezed a bit, as the cloud-based Office 365 gains traction in the enterprise, and leads to an increase in the overall operating costs of the Office business.