) is set to open its first Microsoft Store in Honolulu, Hawaii
and in Detroit, MI. The Honolulu store will be the company's
first outside the U.S. Hiring has started for several positions,
from product advisors to retail store teachers.
Microsoft plans to expand its presence and add more retail
outlets from where products like its tablet Microsoft Surface
could be sold. The stores can also be used to educate people
about Windows operating systems. Microsoft is transforming
several holiday stores into permanent Microsoft retail outlets,
which should further boost product sales and educate people about
its new operating system (OS).
Microsoft Surface was launched worldwide on Oct 26, 2012, with
a price tag of $499.0, which makes it comparatively expensive.
However, it combines both the functionality of a tablet and
Microsoft is very bullish about its tablet and is rapidly
strengthening its global retail presence. Microsoft is a late
entrant into the tablet market and beating the competition at
this point will be an uphill task. Other successful tablets such
) Nexus 7, Samsung's Galaxy tablets and
) Kindle Fire already have a strong presence in the market.
According to IDC, 27.8 million tablets were shipped worldwide
in the third quarter of fiscal 2012. Apple led the race as it
shipped 14.0 million units and captured 50.4% market share.
Samsung and Amazon had 18.4% and 9.0% share of the tablet market,
As per IDC's forecast, tablets may see an uptrend and sales
may touch 282.7 million units by 2016 and Windows-based tablets
may capture 10.0% of the market within the same time period.
Further, as per IDC, PC shipments were 89.8 million units in
the fourth quarter of 2012, down 6.4% from the year-ago quarter.
The PC market has stagnated to some extent owing to the rising
popularity of the smart devices. The launch of a new OS by
Microsoft and the holiday season could not boost the sales of
Microsoft is still battling the slump in the PC market, which
is showing no signs of recovery yet. Although it has been
sluggish in the tablet space, there is still time to create its
own niche. Combining the functionality of tablet and laptop,
Surface can create interest and attract new tablet users. Hence,
expansion of its retail base makes sense. Further, Microsoft's
foray into tablets may ease the pressure it is seeing in its core
Microsoft reported revenue, excluding deferrals, of $21.46
billion in the second quarter of fiscal 2013, which was up 34.0%
sequentially and 2.7% from last year, in line with our estimates.
All except the Entertainment & Devices segment grew both
sequentially and from the year-ago quarter. Entertainment &
Devices were down year over year.
Microsoft has a Zacks Rank #3 (Hold).
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