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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: David Howe who wrote (53755)	12/3/2000 7:11:25 PM
From: David Howe	Respond to of 74651

From the discussion we see that Connors thinks that PC sales should grow by at least 10% per year. He also thinks that MSFT's growth can be "decoupled" from the PC growth rate, thus growing PC software sales more rapidly than the PC growth rate itself. If PC sales grow at more than 10%, and MSFT can grow it's PC software faster than that, AND, you add in new product areas as discussed and rapid growth in their server / enterprise business / etc., the 10% long term growth rate I used in my investment example a few hours ago looks fairly conservative. << QUESTION: Could you comment on what you think is going to be the long term growth rate for the PC market and how do you devise that number? Can you give some color on that? JOHN CONNORS: Our expectation for the long-term growth rate of the PC doesn’t really extend beyond the current year. That is, we don’t do formal forecasting beyond the current fiscal year. We clearly believe that the PC will continue to be a very critical part of the technology industry and will be the principal knowledge worker tool for the next ten to 15 years. I would expect that the growth rates for the PC industry will be double digits. It won’t be 20 percent as it was for most of the ‘90s or the ‘80s, but it should be north of 10 percent. The key thing for Microsoft is to decouple our desktop software growth rates from that of the underlying PC business growth rate. The principal way we can do that is by delivering a hosted or subscription service for knowledge workers. When we introduced our initial knowledge worker service, which we haven’t yet named, nor have we given a release date, I think this community, as well as the business community around the world will start to see what it means to buy hosted subscription services and why people will be willing to fund an annuity model independent of the PC purchase rate. >>

To: David Howe who wrote (53755)	12/3/2000 11:43:22 PM
From: David Howe	Read Replies (1) \| Respond to of 74651

One more area of terrific future growth that I haven't mentioned yet. siliconinvestor.com << Among the various interactive TV initiatives, perhaps the most ambitious is Microsoft's UltimateTV, which marries a full-featured DVR to WebTV-like Internet capabilities. The Microsoft Show Expected to launch by the time you read this, UltimateTV requires a $399 set-top box that you'll buy retail; Thomson/RCA and Sony are the initial vendors; Sony's box comes with a keyboard (you'll have to buy the dish separately), and a DirecTV dish accompanies RCA's (keyboard sold separately). You'll also have to pay a monthly service fee of $10 or $15 on top of a DirecTV programming package (which start at about $30 a month). In the demonstration we saw, the digital video recorder features looked particularly impressive: You can record up to 35 hours of programming, which you ferret out either by browsing or by searching the electronic program guide. When you are ready to watch a recorded show, simply click the My Shows option in a menu that appears when you turn your set on. UltimateTV works only with digital services (AT&T is committed to supplying 7.5 million UltimateTV licenses to digital cable subscribers starting this year); as a result, Microsoft says, recordings are superior in quality to those made from analog TV services. You can also record one show while watching another--something not all DVRs permit you to do. The $10-a-month UltimateTV service includes 3 hours of WebTV-style Internet access via a built-in 56-kbps modem. That's enough to let you dash off an occasional e-mail or surf to a program-related Web site during commercial breaks. If you already have an ISP, you can pay Microsoft an additional $5 per month in exchange for unlimited use of the account with UltimateTV (Microsoft says it imposes the charge because you will be accessing its servers for some content). >>