Microsoft unveils Origami ultramobile-PC initiative
March 09, 2006 12:15:32 (ET)
LOS ANGELES (MarketWatch) -- Microsoft Corp. on Thursday revealed details of a much-anticipated initiative to put ultramobile personal computers into users' hands, unveiling new, lightweight wireless gadgets running on a fully functional version of its Windows operating system.
Microsoft (MSFT, Trade) showcased the devices, about the size of a large paperback book, at the CeBIT technology gathering under way in Hanover, Germany. The announcement followed weeks of mounting speculation and a cryptic marketing campaign surrounding the product developed under the code-name Origami.
The company said the ultramobile devices, powered by processors from Intel Corp. (INTC, Trade), will be available starting in the second quarter from hardware makers like Korea's Samsung Electronics Co. (SSNGY, Trade) They are expected to range in price from $599 to $999, according to Microsoft.
While versions of the device will vary by manufacturer, the ultramobile PCs are expected to weigh under two pounds and come with a 7-inch touch screen that offers several methods of inputting information.
The initiative represents Microsoft's latest attempt to make inroads into the lucrative market for handheld devices and will likely provide it with an additional outlet for selling its software.
The company's shares edged higher in the wake of the news, picking up 7 cents to $27.32. The stock has ranged in price from $23.82 to $28.38 over the past 52 weeks.
Microsoft easily dominates the worldwide market for the software used to power PCs as well as for some key applications, yet its earlier efforts in the handheld market have met with mixed success.
Commenting on the new devices ahead of official details on the launch, RNC Genter Capital Management Chief Executive Dan Genter said: "It's probably not going to be something that's revolutionary enough ... to be a significant change with regards to additional revenue."
The news also comes as Redmond, Wash.-based Microsoft prepares to launch the next version of its flagship Windows, called Vista, later this year.
Some analysts have predicted that the software update will boost sales of the firm's most important product.
Genter stressed the importance of the upcoming Vista launch. Other initiatives like Origami are interesting, yet not as critical to Microsoft's bottom line, he commented.
"We think that a lot of their future is really going to be hinged on Vista," Genter said. His firm, which owns Microsoft shares, manages some $2 billion in assets for both institutional clients and high net-worth individuals.
Genter sees the stock as "somewhat of a weak buy" at current levels and said that shares would be fully valued at about $39 each under the "best of all circumstances."
A price of around $22 a share for Microsoft would represent a "really nice buy point," and its basic value would put its worth at around $31 a share, he added.
Vista will drive a significant and important replacement cycle among computer users, which will be "very, very critical as these older products really get to have a lot more dust on them," according to Genter.
"Vista is just pivotal; it really gives them one of the first really promising new products that they've had in quite some time."
Although representatives for the software giant remained tight-lipped ahead of the Thursday's launch, many industry watchers expected the device would be aimed at the same market as Apple Computer Inc.'s (AAPL, Trade) popular iPod line of music players.
A cryptic Web site, run by Microsoft, heralded a product that "can change your life," but offered no concrete product details before the launch, as part of an apparent marketing campaign designed to generate buzz about the product. The Web site [www.origamiproject.com] has been updated to include images on the new ultramobile devices.
Analysts and others have been looking to a slate of new products in Microsoft's pipeline to help buoy its shares, which have remained relatively flat over the past several years.
Early last week, Microsoft said that it was on track to release Vista, its latest operating-system incarnation, in six different variations in the second half of the year. The release will put the software, a cash cow for the company, on the market in time for the important holiday season.>> |
