Microsoft's stealth rebound?
(MoneyWatch) For years it has been fashionable to write off Microsoft (MSFT). And certainly the company has made major mistakes, falling behind on the shift to mobile computing. Lately, pundits have noted that adoption of Windows 8 has been slow.
Yet despite the bad ink, there are signs that business at the software giant is brisker than many watchers have supposed. In addition, Microsoft is pushing further in some directions that could expand its traditional customer base, positioning the company for faster growth in years to come.
- Microsoft's advances in mobile may hit a wall
- Windows 8 may suffer from business as usual
- Windows RT and Surface: Microsoft's big mistake?
- Forget the horror stories: Windows 8 looks good
One piece of unexpected news comes from Nokia (NOK), another company whose fortunes it has become fashionable to disparage. Although Nokia has, in fact, struggled, it notched solid earnings for the last quarter of 2012. Buoying sales was the company's new Lumia phone, which sold 4.4 million units. Still, such numbers are small compared to sales of Apple's (AAPL) iPhone and Samsung's Android handsets.
But the improvement at Nokia was enough to boost the company's stock price. And here's why that is good news for Microsoft -- all 4.4 million of those Lumias run Windows Phone. That's the mobile operating system from Microsoft that was largely dismissed, along with what many assumed was a "hail Mary" partnership between two struggling companies. According to Nokia CEO Stephen Elop, demand for the phone has been stronger than his management team expected. Whether that is actually true or not, something is obviously happening.
Windows 8: Where's the problem?
Then there is the supposed Windows 8 disaster. Depressed PC sales and questions about the new interface were supposed to explain indifferent sales. But Microsoft recently announced that it had sold 60 million Windows 8 licenses so far, including upgrades and licenses purchased by PC manufacturers.
That leaves some wiggle room for sure, but Microsoft still called it "a similar sales trajectory that we saw with Windows 7," even with lower PC sales than in the past. And that was a popular operating system.
Also boding well for Microsoft are the rumors circulating about its Xbox gaming console. Current models are widely used by owners to stream video. Now Microsoft is expanding the number of video channels it offers. There are also indications that the company may acquire new programming, much as Netflix has started to do. Then there is the new approach to video advertising that Microsoft claims is obtaining high engagement rates, a key to success in online video.
While many have dismissed Microsoft as a dying technological star, the company may ultimately burn longer than many people expected.
Image courtesy of Microsoft