2 Bits of Good News for Microsoft Stock Investors

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Microsoft (NASDAQ: MSFT  ) stock investors may be smiling just a little more frequently lately. The company's stock is up almost 30% from the beginning of the year, and Microsoft has made some positive announcements in the past couple of weeks.

Let's take a quick look two main points the company's investors can be happy about.

1. Windows Phone makes gains
This past quarter, the Windows Phone OS snagged the No. 3 spot away from BlackBerry for the first time, based on shipment numbers reported by IDC. Becoming the third most shipped smartphone OS is big news for Microsoft investors, who have been patiently waiting for the company to make gains in the mobile market.

Nokia (NYSE: NOK  ) should be thanked at least in part. The company ships 79% of all Windows Phones and introduced the platform into markets it hadn't previously has access to. Since the two companies joined forces, Nokia has shipped more than 20 million Windows Phones worldwide. The shipment numbers are important for Nokia, because the company now owes more to Microsoft in royalty payments than it will receive from the company for platform support payments. Nokia was initially getting more from Microsoft than it paid out, but those numbers have now flipped. 

On top of all this, Microsoft recently announced that app downloads have increased 100% since Windows Phone 8 launched and paid app revenue is up 140%. 

Although one month of smartphone OS shipments doesn't equate to a stable lead over BlackBerry's OS, IDC predicts Windows Phone OS will be the fastest growing smartphone platform between now and 2016 -- with a compound growth rate of 71.3%. Third place in the mobile OS world -- with stellar growth to boot -- isn't a bad place to be in at all. 

2. The all-new Xbox One
If there's one thing tech investors get excited about, it's new tech (surprise!), and Microsoft just introduced a doozy on Tuesday. After launching in 2005 as the console underdog, the Xbox has risen to the top of the gaming world. Last month, Xbox once again was the top-selling gaming console -- 28 consecutive months running.

The latest Xbox starts shipping later this year and sports a 500GB hard drive, slot-loading Blu-ray/DVD player, a bundled Kinect system, HDMI in and out, the ability to connect to cable TV stations, and Skype-enabled calling from an HD Web camera. Many believe that the new Xbox isn't just a new console for gamers, but a way for Microsoft to gain significant ground in the in-home entertainment market. With Apple (NASDAQ: AAPL  ) and Roku firmly in the space already, and others like Intel and looking to enter soon, Microsoft will surely have some intense competition for in-home streaming devices.

Apple sold just 5 million Apple TVs in 2012, but when it comes to streaming content through all of its devices, Apple is one of the top competitors. With its iPod, iPad, iPhone, Apple TV, and Macs, Apple takes up 35% of all home network video streaming in North America. The iPad alone makes up 10% of all entertainment Web traffic streamed at home. Microsoft may have to fight off all of Apple's devices it if wants to take away Apple's device streaming dominance, but it definitely has the technology to do so. Unlike Apple, the Xbox offers hand gestures, voice commands, video calling, and, of course, gaming. 

Microsoft is expected to release more details about the Xbox One at the E3 gaming conference next month, but with all of its new features, the Xbox One just jumped ahead of the competition.

Last month I incorrectly stated in a Fool article that it might not be a great time to be a Microsoft stock investor. It seems that Microsoft investors do indeed have some significant things to be a happy about right now.

Obviously, the Windows Phone news and the Xbox One debut aren't the only things investors should care about, but it does show that the company is fighting hard in the extremely competitive mobile and home entertainment markets. If IDC's predictions for Windows Phone come true -- and if the new Xbox sells just as well as the current one -- then investors may have much to look forward to in the future.

Microsoft has its hand in a lot of tech pots with the Xbox One, Windows Phone, Surface tablets, and WIndows 8 OS, but some investors are unsure whether the company is a buy. In a new premium report on Microsoft, a Motley Fool analyst explains that while the opportunity is huge, so are the challenges. The report includes regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

Read/Post Comments (2) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 22, 2013, at 9:37 PM, techy46 wrote:

    Good time to take some of those 30% profits and go away in May while everybody tries to first out if Apple's Fall announcements will really matter. In the meantime, stay in Nokia and add durimg the dips to see if Q2 2013 Asha and Lumia shipments pick up in July earnings report. Also, swap out of those INTC 15 and 18 LEAPS for 20's. Here comes the summer fun.

  • Report this Comment On May 23, 2013, at 9:08 AM, lee654 wrote:

    Microsoft should buy both companies. Do a first-class advertising campaign worldwide and they could have 70% of the Smartphones

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