Microsoft (MSFT) has always been a leader in the desktop PC business and now I think it is one of the best positioned companies for the industry's transition from desktops to mobile computing. While mobile computers and smartphones running windows software haven't exactly been best sellers, Microsoft not only revealed new products at the E3 video game event, but rumors about the new Xbox 720 and now the release of the new Microsoft Surface will help the company push further into the mobile markets.
The first potentially game changing software announced by the company is called Microsoft SmartGlass. This is a new app that connects tablets and mobile devices to a user's Xbox 360 in ways that haven't been seen before. As part of the demo at the E3 event, the presenter was watching the movie "Sherlock Holmes" on his tablet during the plane ride. Then on stage, using the kinect voice command feature, transferred the movie to his Xbox connected TV which picked it up right where he left off. While watching the movie on the television, the SmartGlass app then began pushing content such as character information, location and production facts about the movie and more information about the film to the tablet.
For Xbox gamers, the SmartGlass app provides enhanced interaction such as the ability to design plays in Madden football from a mobile device and instantly run them on the Xbox game. While playing Halo 4 on the Xbox, a user will be able to target a ship and have schematics, specifications and intelligence about the target automatically pushed to the mobile tablet or smartphone. While the SmartGlass app is said to work with all mobile devices including the iPad, there is no doubt that Microsoft hopes it will increase sales and awareness of its Windows 8 tablets, PCs and phones.
One of the most important announcements at the E3 event came with less fanfare than others and was somewhat swept under the rug by the media covering the event. That was the announcement that Xbox would now support Internet Explorer. Now users are able to navigate the internet right on their televisions with either voice commands or using their mobile devices. This should not only accelerate the propagation of mobile devices, but is also another nail in the desktop PC's coffin.
Microsoft's Leaked Documents
Gamers and investors alike who were looking to hear about a release date for the next Xbox were sadly disappointed. However, there have been rumors swirling around the internet of a 2013 release date based off of a leaked internal Microsoft document. The document has yet to be authenticated, but many industry insiders have said some of the details and facts in it appear to be legitimate. The 56-page document was released several months ago and mentions the SmartGlass app, which was only revealed to the public a couple weeks ago.
The document was allegedly created in August of 2010 for an internal discussion and does mention several employees by name. In addition to the 2013 release date for the 'Xbox 720', the document sets a price of $299.99 and details plans to release Kinect V2 and augmented reality glasses. The Xbox 720 is expected to have a 10 year lifecycle and the creators of the document view competition from not only Nintendo (NTDOY.PK) and Sony (SNE); both of which the writers expect to release Gen 8 consoles in 2012 and 2013 respectively, but also from Google TV (GOOG) and Apple TV (AAPL).
'Microsoft's Major Announcement'
Over the weekend Microsoft announced to the media it would be hosting a 'major' announcement after the bell on Monday. The announcement was shrouded in secrecy and rumors were rampant across the internet. As the presentation began Steve Ballmer came on to the stage and started touting Microsoft's Windows software as the "most flexible software ever created" and that "Windows has exceeded our expectations" and now "powers over a billion PCs". Ballmer goes on to say "with Windows 8, we did not want to leave any seam uncovered. We wanted to give it its own companion innovation." Then he introduced the new Microsoft Surface tablet PC.
The Microsoft Surface is 9.3mm thick and has a scratch resistant liquid metal case, with a stand built into the device. The presenter touts it as having "the best WiFi of any tablet today" and briefly connects to Netflix and the movie loads almost immediately. It also has HDMI capability and the cover has a 3mm touch keyboard attached. The Surface has a 10.6" HD display and stylus pen that allows the user to write on it using 'digital ink'. The magnetic stylus pen attaches to the top of the tablet and the 'ink' has 650dpi, making it the highest resolution stylus pen available. The presenters all call the Surface a PC and were very careful not to call it a 'tablet'.
One of the cooler features is the touch cover which when connected to the device turns the same color as the desktop. The full keyboard, which is part of the touch cover is also something that the iPad has been lacking. The Surface looks like it will be available in 32GB, 64GB and about three months later the Pro version at 128GB. During the presentation, the only hint that was given towards price was that it is priced to compete with Ultrabooks. The average retail price of a tablet is around $500, while the Ultrabooks start at a $1000.
With the industry transitioning away from desktop computers and into tablets and smartphones, Microsoft has positioned itself well in both markets. Windows Phones have been gaining ground on both the iPhone and Android. The release of Windows 8 should be a catalyst for the stock and is expected possibly this fall. Now with the release of Microsoft's Surface and its entry into the hardware space, the company is primed to compete with Apple. Add in a new Xbox, possibly in 2013, and Microsoft is a must buy stock at these levels and like some other analysts have said could easily double by 2015.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in MSFT over the next 72 hours.