Daily: Does Microsoft have its mojo back?

Daily commentary

In the tech world the big news is Microsoft’s unveiling of the Surface Tablet and Windows Phone 8 on back to back days. There is a lot of positive buzz around these two initiatives. The question, of course, is whether it will vault Microsoft into the big leagues in the mobile arena. As a stock, Microsoft is reasonably priced with a P/E of 11x and a dividend yield of 2.6%. Any additional bump in the high growth mobile space will be a big positive for Microsoft’s earnings growth and it makes Microsoft a company to reckon with in tomorrow’s big markets via its Xbox, tablet, and phone offerings. But the news doesn’t just affect Microsoft, it is a big deal for Nokia as well as Nokia is now tied at the hip to Microsoft in the mobile space.

My general sense here is the this is by no means a hone run for Microsoft because they are so far behind in mobile, both in tablets and phones. However, on both counts the offering that Microsoft has put forward is credible. I really like the concept of the Surface tablet integrated with a keyboard for not just consuming media but for creating content. I own two tablets. the Motorola Xoom and the Amazon Kindle Fire. I have also used my wife’s iPad extensively and my general takeaway is that none of these devices are usable on the road for content creation. I have even hooked up an external Bluetooth mouse to the Xoom to test it in that capacity. For me, I must always take a laptop on trips because the tablets won’t cut it. The secret of Microsoft’s surface tablet is that it is a hybrid laptop/tablet content creation device, meaning that this device doesn’t just go toe-to-toe with the iPad but also with Netbooks and laptops more generally.

Windows Phone 8 is allegedly a great operating system that allows a lot more user interface control than do Android or iOS. But Microsoft is way behind here and I don’t think they can catch up. Moreover, in my view, the lack of upgradeability is a huge blow for Nokia because it will thwart Windows Mobile adoption. This is a huge strategic error and a very big deal. Look at the last of the five pieces connected to this story to see the kind of reaction likely to come from the existing installed user base. Microsoft could overcome this by giving discounts to existing Windows Mobile users and granting them a few free apps to get started on the platform. That will get users to upgrade and maintain the platforms momentum. Otherwise, Nokia’s goose is cooked. All of the momentum for Windows Mobile has been stopped dead because Microsoft has announced that all existing devices and those sold over the next 18 months will not be future-proof. To me that impacts Nokia in a very negative way.

The question for Microsoft now has to do with execution. If they can get this thing out of the gate and through their sales channels, they can do some damage in mobile.

Links commentary

Europe: I have written this week’s commentary on the euro zone outside the paywall in two parts. I won’t say much about the euro zone as a result. You all know that I am not optimistic any more that Europe can get it done. I think we have less than the 3 months George Soros has warned we have. The bank runs will cripple Europe as the debt deflation has already taken hold.

China: The worry here is the so-called Chindown, a great neologism for a hard landing in China. The Chinese PMI came out demonstrating that Chindown is certainly a force to reckon with and you know that my initial worry as 2012 started was China and India. Michael Pettis has posted a piece recently on China that says China will lift out of its malaise in this next quarter. If it doesn’t Chindown will be a problem. So Q3 is going to be China watch.

Jonah Lehrer: This whole self-plagiarism thing is a bit over the top in my view. Can someone explain self-plagiarism to me? It seems nonsensical to me. My view: If I wrote it, it’s not plagiarism. It’s my bloody idea. Personally, I self-quote constantly and I definitely, definitely re-use the same language for consistency sake. Is that self-plagiarism? Does it matter? The whole storyline is troubling and ridiculous in my view. You tell me what you think.

That’s it. I’m off to watch Euro 2012! Here are the links.

Forget Grexit, it’s time to fret about ‘Chindown’ – FT.com

Marc to Market: What Not to Expect from the European Meetings Today and Friday

Record number of over-65s in jobs – Telegraph