Investor Reaction To Microsoft’s Rumored CEO Choice: We’re Fine With That

Yesterday in after-hours trading, Microsoft picked up a minor gain. The trading period was interesting as news that Microsoft’s board was tipped to select its own Satya Nadella as its next CEO had broken.

This morning, the company’s stock has risen more than 2 percent in a generally down market day. Investors appear at least blasé with the CEO choice.

If Microsoft had fallen sharply, or risen dramatically directly following the news, that would have been a different sort of signal.

Is it negative that Microsoft’s stock didn’t spike following the Nadella news, perhaps indicating that the company could have done better in its choice? You could read it that way, but I think two things can force us — for now — to not be too negative. Primarily, Microsoft has not announced the news itself, so we’re still discussing probabilities and potentialities, no matter how strong the sourcing is.

And secondly, I doubt that the street is too familiar with Nadella. Uncertainty is usually a sell, sure, but Nadella’s coverage has generally mentioned his strengths, perhaps providing some mental insurance to the trading classes.

The caveat, naturally, is Nadella’s weaknesses — such as they are. I’ll be digging into this later today, but the simple summation is while he is tops at technical work and enterprise-facing efforts, he lacks commensurate experience with consumer products and hardware, and could therefore lack the leadership and vision he needs to drive Microsoft forward in those key areas.

For now, however, the market is telling Microsoft it is fine with its supposed choice.

Top Image Credit:  Dan Taylor/Heisenberg Media 

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That rumored 'iPad Pro' could be more than just a big iPad

iPad Air with a keyboard from Zagg.

(Credit:Zagg)

If supply chain and analyst chatter is accurate, the rumored "iPad Pro" could marry the MacBook Air with the iPad.

That's what Evercore Partners analyst Patrick Wang thinks, according to a report at Barron's.

Arriving in fall '14, Apple goes Enterprise with an 12" iPad. Powered by the A8 chip...this expands ARM's reach and, once again, transforms the traditional notebook market as we know it.

Expect a 2-1 hybrid -- think iPad

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Sony Rumored To Be Considering A Windows Phone Handset In 2014

According to The Information, Sony could release a Windows Phone device, diversifying its mobile device lineup, bolstering Microsoft, and perhaps demonstrating a growing wish among hardware firms to hedge against an Android-dominated future.

Sony appears to be strongly interested in the project. The Verge wrote this morning that the company has continued the project despite Microsoft’s plan to purchase Nokia’s handset business. Its willingness to consider building a Windows Phone device despite the platform having a firm home-advantage tilt towards Microsoft’s own hardware is indicative.

For Sony the move would diversify its mobile line away from Android, a platform now generally associated with Samsung hardware. The irony to that is the simple fact that Nokia is the de facto Windows Phone OEM, so Sony would be entering into a second realm where it would be a second-place player.

The winner in Sony’s potential entrance is Microsoft, even if the release of a Vaio-branded Windows Phone handset could potentially slow sales growth of its — soon to be owned — Lumia phones. Microsoft would collect a per-unit fee, perhaps enjoy faster overall platform sales growth, and, of course, there has ever been an implied connection between the Windows Phone and Xbox product lines. We have yet to see hard evidence in my estimation that one leads to greater use of the other, but the shared Xbox platform experience must have some impact on consumer activity.

Therefore, Sony building a Windows Phone would have some positive impact on Xbox. And that would, presumably, come at the cost of Playstation momentum.

According to the latest public data, Nokia’s control of usage share in the Windows Phone hardware ecosystem is now more than 92 percent. That’s dangerous for Microsoft as betting your mobile platform on a single device stack could lead to platform risks (a poor hardware update cycle could slow growth for a year, etc.), meaning that Sony’s joining the Windows Phone cadre could better moor Windows Phone.

When Windows Phone launched, it did so with OEM partners as diverse as Dell. There has been a winnowing. If Microsoft can flip that trend, it will have gone a ways to proving that the progress it made in 2013 was no fluke.

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Nokia Normandy rumored to be low-end Android-based phone

evleaks revealed at the end of last month. While not much was known about the device at the time, the lack of hardware shutter button, capacitive buttons and LED flash indicated that this mystery phone was likely an Asha device intended for emerging markets or budget-minded users. Yet, if a report from The Verge's Tom Warren is accurate, there may actually be a lot more to the Normandy than what we had originally assumed. Warren has checked with multiple sources who claim that the phone is an Android-based device due for a 2014 release.

This may seem like a stretch, given the fact that Nokia's device division is currently awaiting an acquisition with Microsoft, but Warren offers a few points of clarification. First, he says, the Normandy is meant to be a low-end Asha equivalent that features a forked version of Android that isn't associated with Google services, which means Nokia would be able to fully customize it however it wants, much like Amazon does with its Kindle Fire. Doing this would still give Nokia full control over the device ecosystem, while giving users the chance to enjoy full smartphone apps -- something the company has had a difficult time figuring out how to do on the Asha line. The question is, would Nokia rely on a third-party app store or try to set up one of its very own? That's still an unknown, but this is assuming the Normandy even sees the light of day; if the rumor is true, our guess is that this project was already underway before Microsoft's acquisition, and will probably be released before the merger is complete -- if it gets released at all.

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Source: The Verge

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