[opendtv] Microsoft shares retreat after downgrade

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
  • Date: Fri, 6 Aug 2010 07:01:45 -0400

http://www.seattlepi.com/business/1310ap_us_microsoft_mover.html

Microsoft shares retreat after downgrade

THE ASSOCIATED PRESS

NEW YORK -- Shares of Microsoft Corp. edged lower Wednesday after Global Equities Research analyst Trip Chowdhry downgraded the software giant in part due to increased competition from Apple's Macs to its Windows operating system.

THE SPARK: Chowdhry, who downgraded Microsoft to "Equal Weight" from "Overweight," said in a note to investors he does not expect the company to see any upside to his estimates for the next 12 to 18 months.

Increasingly, companies are giving their employees a choice to either use Microsoft Windows PCs or Apple Inc.'s Macs, the analyst said. And, increasingly, employees are choosing Mac over Windows. To boot, Chowdhry said 70 percent of college freshman are entering school with Macs, up about 10 percent to 15 percent from a year ago.

He also said attach rates for Office 2010 are declining, especially in the public and education sectors and in call centers, which in all make up about 10 percent of the Office business. Attach rates refer to copies of Office sold per each copy of Windows owned.

THE ANALYSIS: "Our research is indicating that Microsoft is unable to connect with the new generation of users," Chowdhry wrote, adding that this could cause problems down the road when these students enter the work force and once again pick Macs over Windows.

SHARE ACTION: Microsoft's shares fell 51 cents, or 2 percent, to $25.65 in afternoon trading. The stock has traded in the 52-week range of $22.73 and $31.58.


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