Microsoft Corporation (MSFT)’s Future Never Looked So Promising

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Until a few months or a year ago, Microsoft Corporation (NASDAQ:MSFT) was not considered to have a solid future by a section of investors. That was because of the competitive world and how the company’s mobile platform efforts lagged behind to its rivals. Its entry into smartphone segment was not at all an encouraging factor and its investments in Nokia handsets proved to be a fatal. However, its focus on cloud has kept itself on the higher scale in the last one year period. But above all, the recent events have totally changed the perspective on the company and its promising future.

Microsoft Corporation (NASDAQ:MSFT)

Surface Book – A Game Changer

Microsoft Corporation (NASDAQ:MSFT) faced hard times in convincing users about its smartphone entry and the response to it was not all that great to be encouraged to think about a new product. Alternatively, the company was not as lucky as Apple Inc. (NASDAQ:AAPL) or Alphabet Inc (NASDAQ:GOOGL) in enjoying success with their iPhone or Android OS. While it had a number of fans, the software firm’s tablet also did not draw the expected crowd pulling. In fact, after the success of Xbox, the company has been struggling to come up with a product that can be considered as a big impact. The response to its latest Windows 10 is a measured one indicating that the OS is neither a success nor a failure.

Given the kind of situation, Microsoft Corporation (NASDAQ:MSFT) entered totally a new area, that is making of laptop called Surface Book. The immediate response was stunning and outstanding, receiving overwhelming support from different sections of the community, be it technologists or investors or analysts. No one was expecting such a high-end laptop from the staple of the biggest software firm. The product is directly pitted against Apple Inc. (NASDAQ:AAPL)’s MacBook and not competing with any tablet. It has its own advantages and can surely be a game changer in the laptop segment.

Cheap And Powerful

Most importantly, Microsoft Corporation (NASDAQ:MSFT)’s Surface Book is cheaper, as well as, more powerful than the MacBook Pro. That is great news for design makers. It has come up with different configuration with energy-efficient CPU of Skylake from Intel Corporation (NASDAQ:INTC), as well as, integrated HD 520 GPU. The secret of the success of the Surface Book is Nvidia Corporation (NASDAQ:NVDA)’s discreet GPU. The software firm hinted earlier that would be superior to the MacBook Pro. Of course, the product is more focused on enterprise employees with the highest end of the Surface Book priced at $2,699.

Microsoft Corporation (NASDAQ:MSFT)’s Surface Book will be liked by graphic designers and could wean away Mac-using designer with the help of Nvidia. The investments on the laptop on a specific segment will be key for future growth. Though the number of units sold in this segment might be lower, its price realization appeared to be strong.

Skype Desktop Update

The company has also unveiled Surface Pro 4 and Microsoft Band’s second edition recently apart from updating Xbox and Skype desktop, which will bring reality close to science fiction. The company’s latest update  brought the translation of six languages, i.e. Mandarin, German, French, Spanish, and English. What was once an imagination of Star Trek writers, Skype has brought into the reality of translation with a phone call away? Also, for those using the messaging platform, there are 50 different language translations available. The Skype Translator was a project in the works for more than ten years.

Microsoft Corporation (NASDAQ:MSFT) is well aware that it needs to invest today to realize its gains in the future. That was the simple reason it chose to spend about 13% of its sales on R&D while intangible investments accounted for 6.7% of its sales. That meant that the company spent more than 3x on intangible investments. In the last twenty years, the company’s average spending on R&D and intangible assets was 15% and 8% of its sales respectively. These have boosted their productive assets that were not visible to the financial community. In any case, the recent events put the company’s future to be so promising than it looked previously.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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