UBS‘s Brent Thill this morning reiterates a Buy rating on Microsoft (MSFT) and a $33 price target after reflecting on the buzz around the company’s forthcoming update to Windows 8, “Windows Blue,” screen shots of which have been leaking onto the Internet, as The Verge’s Tom Warren noted earlier this week.
After hosting a conference call with Microsoft expert Mary Jo Foley, Thill concludes Microsoft is pursuing a more aggressive pace of updates for Windows and its other products:
MSFT starting to issue updates more quickly vs. big bang refresh approach which is important as it more quickly improves the competiveness of MSFT�s platform adding necessary new features/fixes/UI tweaks as well as deep level kernel changes that improve the MSFT experience and open-up new markets like sub-10 inch tablets. MJF expects RTM for Client and Server Blue around August ’13, Office Blue (Gemini) in fall �13, Phone Blue late 2013/early 2014. The Build conference just announced for the last week of June in SF, usually MSFT needs things to show developers so perhaps we see 7 or 8 inch W8 tablet by then even if just in demo form.
Additional observations from Foley include that the Surface tablet computer is too pricey, and battery life too slim at 4 to 5 hours: “MSFT needs to cut the price on Surface RT to a couple hundred dollars.”
Also, Foley believes Microsoft Office is coming for Apple‘s (AAPL) iOS-based devices, and Google‘s (GOOG) Android, this year, based on Office 365 subscriptions:
MJF believes we will see Office on iOS/Android perhaps as soon as this year. MJF believes the delivery/payment model will be as an add-on to an O365 Home/Business Premium subscription entitling you to install a localized version of Office to an iPad. MJF notes MSFT is not denying Office on iOS/Android which is telling and has heard from people that claim they’ve seen Office on iPad (though she hasn�t seen it herself). Strategically this move makes sense as MSFT is reimagining itself as �device and cloud services� focused so extending Office to other platforms fits that shift.
Microsoft shares today are up 18 cents, or 0.6%, at $28.55.
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