MSFT’s Win 8 Waits for Apps: Look to December, Says Citi
The Street is slowly starting to rev up its models for Microsoft 's ( MSFT ) mammoth roll-out last week in New York City of Windows 8 at retail, as well as its Surface RT tablet computer, and the company's presentation for the new Windows Phone 8 on Monday in San Francisco , followed by its " Build " developer conference yesterday. CEO Steve Ballmer yesterday told Build attendees upgrade sales of Windows 8 totaled 4 million in the first three days on sale since Friday. Rick Sherlund with Nomura Equity Research had started things off on Friday morning with a note reiterating his Buy rating on Microsoft shares, and $37 price target, calling the Surface RT tops in the category, but conceding Microsoft shoppers need time to get used to it, and need more apps: The Windows RT based Surface tablet from Microsoft is very cool and we think sets the standard for others to follow [...] The Intel based Clover Trail processor is not available for Windows 8 yet, but within the next few months this should deliver long battery life and full Windows 7 compatibility, so one can run iTunes and other legacy apps. We think this will be the most popular [...] Windows 8 will take time to gain traction as many new touch tablets and Ultrabook touch devices are not yet available, there are still not a lot of apps, and we think many users will want to buy new hardware. This morning, Citigroup 's Walter Pritchard reiterates a Buy rating on Microsoft stock, and a $35 price target, writing that there could be a wave of applications come December or January: An expected early days shortfall of the Win8 platform, however right from the start CEO Ballmer highlighted big names like Twitter, Dropbox, ESPN and SAP as companies with apps on the horizon. Our conversations with developers and partners suggest a huge influx of projects leading up to and following the official launch of Win8. Porting over existing iOS and Android apps are currently dominating discussions. A provider of mobile analytics noted more than half of his iOS customers were evaluating for Win8. Porting existing apps take 3-8 weeks and the approval process can take 1-3 weeks so expect another wave of apps in December / January. UBS 'sBrent Thill likewise last night reiterated a Buy rating and a $37 price target, writing that he has "been immersed in the Windows 8 ecosystem for the past few days" through the various product introductions.