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Ballmer and Microsoft Need to Wake Up

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Microsoft's (NASDAQ: MSFT  ) annual shareholder meeting, held in Redmond, Wa., in front of about 450 shareholders, turned out to be the usual fare from CEO Steve Ballmer. The "usual," at it relates to Ballmer, is the Microsoft executive fighting back yawns as he discusses strategic direction and answers questions.

As a shareholder, you don't need your CEO leading group cheers, but with all that's been going in the Microsoft camp of late, a little excitement is called for. The rollout of the Windows 8 OS, early indications of smartphone sales success running its new OS, and Microsoft's own tablet hitting the shelves should be enough to perk up the dreariest of CEOs.

Reasons to ignore Ballmer's blase attitude
Microsoft is in a time of transition, from selling strictly software services to aiming at becoming a cloud computing specialist, hardware provider, and mobile services leader. As Ballmer put it, Microsoft is "innovating on the seam between software and hardware." It's a transition Ballmer concedes should have happened sooner to better compete against industry leaders Apple (NASDAQ: AAPL  ) and Google (NASDAQ: GOOGL  ) . The delay hurt, as Apple and Google continue to pull away from the pack.

But even accounting for an admittedly late start, Microsoft is showing signs of success. For instance, phones running Microsoft's OS are selling at four times the pace they did at this time last year. Windows 8 licenses are at 40 million in its first month. That's tracking well ahead of 2009's Windows 7 launch.

Though Ballmer won't release numbers for Windows phone sales, one of Microsoft's primary smartphone partners, Nokia (NYSE: NOK  ) and its Lumia line, are selling out at both and AT&T's online stores. Samsung and HTC also carry Windows 8 OS phones.

Going forward
There's no denying Microsoft stock is in a funk. Though its stock price is up 9% in the past year, and 4% year to date, shareholders are understandably anxious as Microsoft's share price meanders. At $228 billion in market cap, Microsoft is one of the largest tech companies in the world, and it's time to start acting like it (again).

The licensing of Windows 8 is on a record pace, smartphones running Microsoft's OS are selling at a nice clip, and the Surface tablet is off and running. So, what are investors waiting for? If it's a rousing, motivational speech from the Microsoft CEO, that's going to be a long wait.

Instead, focus on Microsoft's $66.6 billion in cash, a recently renewed dividend yield of 3.4%, and several new products on top of its existing, multiple lines of revenue. Microsoft is poised for a run, it just needs a swift kick to get it started. Whether the nudge comes from Windows 8 licenses, smartphone OS adoptions, or Microsoft Surface tablets doesn't matter; it won't take much.

It's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, now the company is looking to make a splash in this booming market. In this brand-new premium report on Microsoft, our analyst explains that while the opportunity is huge, the challenges are many. He's also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

Read/Post Comments (4) | Recommend This Article (3)

Comments from our Foolish Readers

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  • Report this Comment On November 29, 2012, at 11:14 PM, RandomMeaning wrote:

    Considering most of those 40 million licenses are for pre-installs on PCs which haven't been sold yet, it means very little until someone actually buys the PCs they will be installed on. By all accounts PC sales are slow and getting slower. The real question is how long will it take to sell those 40 million PCs? How many will be sold per quarter going forward?

    Windows 8 is not providing the "tide that lifts all boats" that the PC industry was hoping for.

  • Report this Comment On November 30, 2012, at 11:52 AM, lowellmk wrote:

    The new interface is going to create a huge problem - enterprises are NOT going to want to swap out their familiar interfaces and have to retrain and retool their employees. MSFT, with Win8, is going after the IOS Market at the expense of their sweet spot - the enterprise. And guess what? MSFT aint Apple.

    Ballmer needs to go. Now.

  • Report this Comment On December 01, 2012, at 6:59 PM, JohnCriss38 wrote:

    "MSFT aint Apple."

    This almost sounds like "China aint America" or something like that!

    Why should one compare things like this?

    You have to remember, that not every one out there is an Apple fan like you.

    And it would be really naive to think that Apple could conquer the whole world.

    Think at least two of the biggest countries in the world: India and Russia!

    In my opinion, there is still enough room for a third ecosystem. Especially, in emerging big markets Microsoft´s and Nokia´s position and brand are very strong!

  • Report this Comment On December 04, 2012, at 12:47 AM, sssteverrr wrote:

    The only reason for anyone to stick with Microsoft was their familiarity with Windows. Now it seem to me at first glance that the Mac OS looks more like windows than windows does, plus the Macs are so damn beautiful.

    I think people who think Apples growth has peaked fail to realize that Apples next big thing may be the Mac

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