SEATTLE - Satya Nadella, the Indian-born self-described cricket fanatic who took over as Microsoft Corp's chief executive last month, makes his public debut on Thursday and is expected to go on the offensive right away with some bold strokes.
When Nadella hosts his first major press conference this week, he's likely to describe - if not officially launch - versions of Word, Excel and PowerPoint designed for Apple Inc's iPad, looking to cash in on a market worth up to $7 billion a year, according to Wall Street analysts.
The technology behind the software is not ground-breaking, but the strategy is: It puts Office at the heart of the company's push to become a leading services company across a variety of platforms - possibly at the expense of Windows and its own Surface tablet.
That perceived willingness to break with the Windows tradition, which remains co-founder Bill Gates' most enduring legacy, has helped spur Microsoft shares to $40-plus levels not seen since the dotcom boom of 2000.
Wall Street is now guardedly optimistic on a company that, while still garnering billions of dollars in annual profit, risks gradual obsolescence in a mobile-powered tech industry.
"The fact that Nadella is going to pull the trigger (on Office) shows he's not just an insider that's going to continue the status quo. Right now, it's a blank sheet of paper," said Daniel Ives, an analyst at FBR Capital Markets.
Depending what Microsoft charges for Office on the iPad, and how many of the scores of millions - and rising - iPad users adopt it, it could rake in anywhere between $840 million to $6.7 billion a year in revenue, estimates Raimo Lenschow, an analyst at Barclays.
Rick Sherlund, an analyst at Nomura who has urged Microsoft to put its most lucrative franchise on the iPad for some time, welcomed the idea but was more cautious on the rewards. He estimates that an iPad Office would generate only $1 billion or so in new revenue a year, as many potential users will already have corporate licenses that can be converted to the new product.
And it's unclear how much of its revenue will be surrendered to Apple, which generally takes a 30 percent cut of app sales through its store. Microsoft and Apple declined comment.
OPTIMISM BOOSTS SHARES
The anticipation of Nadella's mobile-centric strategy has pushed Microsoft shares up 11 percent in the seven weeks since he took the helm, and they are now rolling along at 14-year highs.
On Thursday, Nadella is officially slated to talk about mobile and cloud strategies. But investors and industry executives will be just as attuned to any signals from the new CEO on whether he's willing to take Microsoft in a radically different direction.
To some investors, steering a new course for such a massive entity - Microsoft is the second-largest U.S. tech company by market value - is a daunting task. And some, who would rather have seen an energetic outsider like Ford Motor Co's Alan Mulally get the job, are yet to be convinced Nadella has the leverage to make the necessary change.
But bold moves with Office, and signifying a renewed drive to conquer the mobile arena and 'cloud' computing after years of shackling its best products to PC-centric Windows, are seen as a promising start.
"This is something that should have happened a few years ago," said J.P. Gownder, an analyst at tech research firm Forrester. "Holding Office for iPad as a hostage in the tablet war didn't work out well for them. They have to start to undo this negative behavior."
Nadella has more work to do as well on the devices side of Microsoft's business plan. Windows-powered phones are well reviewed but held only 3 percent of the global smartphone market last year. Its Surface tablet, an iPad competitor, had 2 percent of the tablet market, according to tech research firm Gartner.
Microsoft's $7.2 billion deal to buy the handset unit of Nokia, now delayed in closing, is unpopular with many investors who view it as a doomed defensive play to curb Google Inc's Android's dominance in the smartphone market.
It is "an acquisition not even a mother could love," according to Nomura's Sherlund.
Wall Street will be listening for Nadella's thoughts on the Xbox, the subject of renewed spin-off talk recently, and his willingness to buy his way into cloud-based computing services exploited by growing startups such as Dropbox and Evernote.
"M&A specifically on cloud is going to be key, around big data, cybersecurity, software-centric deals," said Ives at FBR. "Give investors a bone, and they will believe."
Tuesday, March 25, 2014
Search back on for MH370 wreckage
The search for wreckage of crashed Flight MH370 resumed Wednesday after the weather improved, with Chinese ships and Korean planes joining the hunt over a vast stretch of the Indian Ocean.
Gale force winds, rain and big waves prevented any sorties being flown on Tuesday but 12 aircraft will be in the air Wednesday while Australia's HMAS Success plans to conduct a surface sweep of an area where two objects were spotted this week.
China’s polar supply ship Xue Long was also due in the area, with other Chinese vessels on their way, as the search intensifies for the Malaysian Airlines jet that crashed into the sea after vanishing on March 8 with 239 passengers on board.
"Today’s search is split into three areas within the same proximity covering a cumulative 80,000 square kilometres," said the Australian Maritime Safety Authority, which is coordinating the search.
"AMSA has tasked a total of 12 aircraft today to search for possible objects in the search area."
Seven of them are military planes and five civilian.
Australian Prime Minister Tony Abbott said the search would continue until there was no hope of finding anything.
"We are just going to keep on looking because we owe it to people to do everything we can to resolve this riddle," he told the Nine Network.
"It is not absolutely open-ended but it is not something we will lightly abandon."
Six countries are now assisting in the operation -- Australia, New Zealand, the United States, Japan, China and South Korea -- to help bring some closure to relatives with definitive physical proof of the plane's destruction.
The US Navy has also sent a specialised device to help find the "black box" of flight and cockpit voice data, along with a robotic underwater vehicle that can scan the ocean's depths.
Before the weather halted operations on Tuesday hopes had been high that wreckage would be found after two new objects -- a green circular item and an orange rectangular one -- were spotted on Monday by an Australian military plane.
This followed larger "white and square" objects seen by a Chinese Ilyushin IL-76 reconnaissance plane, which came after satellite images and data captured by Australia, China and France showed indistinct items in the southern Indian Ocean
Mark Binskin, vice chief of Australia's Defence Force, underscored the daunting size of the area under scrutiny by air crews flying exhausting sorties out of Perth.
"We're not trying to find a needle in a haystack, we're still trying to define where the haystack is," he told reporters on Tuesday.
Gale force winds, rain and big waves prevented any sorties being flown on Tuesday but 12 aircraft will be in the air Wednesday while Australia's HMAS Success plans to conduct a surface sweep of an area where two objects were spotted this week.
China’s polar supply ship Xue Long was also due in the area, with other Chinese vessels on their way, as the search intensifies for the Malaysian Airlines jet that crashed into the sea after vanishing on March 8 with 239 passengers on board.
"Today’s search is split into three areas within the same proximity covering a cumulative 80,000 square kilometres," said the Australian Maritime Safety Authority, which is coordinating the search.
"AMSA has tasked a total of 12 aircraft today to search for possible objects in the search area."
Seven of them are military planes and five civilian.
Australian Prime Minister Tony Abbott said the search would continue until there was no hope of finding anything.
"We are just going to keep on looking because we owe it to people to do everything we can to resolve this riddle," he told the Nine Network.
"It is not absolutely open-ended but it is not something we will lightly abandon."
Six countries are now assisting in the operation -- Australia, New Zealand, the United States, Japan, China and South Korea -- to help bring some closure to relatives with definitive physical proof of the plane's destruction.
The US Navy has also sent a specialised device to help find the "black box" of flight and cockpit voice data, along with a robotic underwater vehicle that can scan the ocean's depths.
Before the weather halted operations on Tuesday hopes had been high that wreckage would be found after two new objects -- a green circular item and an orange rectangular one -- were spotted on Monday by an Australian military plane.
This followed larger "white and square" objects seen by a Chinese Ilyushin IL-76 reconnaissance plane, which came after satellite images and data captured by Australia, China and France showed indistinct items in the southern Indian Ocean
Mark Binskin, vice chief of Australia's Defence Force, underscored the daunting size of the area under scrutiny by air crews flying exhausting sorties out of Perth.
"We're not trying to find a needle in a haystack, we're still trying to define where the haystack is," he told reporters on Tuesday.
Monday, March 24, 2014
Sportonomics: What gear makers are doing with all that data from running apps
Eight years after hitting the market the Nike Plus run-tracking app boasts more than 20 million downloads worldwide, with its users logging more than 1.6 billion kilometers.
And while websites and software dedicated to storing run statistics proliferate, running manufacturers are hustling to integrate them into product offerings.
Adidas is currently re-vamping its MiCoach program, while industry newcomer Under Armour recently paid $150 million (U.S.) to acquire Map My Fitness, an online community that boast 80 million users and includes MapMyRun.com.
For shoe companies, embracing run-tracking technology makes sense. These apps give manufacturers valuable data on their customers both as athletes and as consumers. And they facilitate social networks that allow runners to compare and share run data with friends.
But after nearly a decade of Nike Plus and similar programs, what are shoe companies doing with all the information they’ve gleaned?
Experts say they’re not using it to bombard you with marketing messages, though in the long term apps like Nike Plus and MapMyRun can strengthen sales.
But in the short term, says Nike spokesperson Claire Rankine, programs like Nike Plus build brand loyalty while giving companies feedback they can use to improve future products.
“The payoff for us is athletes having access to something that allows them to perform better,” says Rankine, Nike Canada’s director of communications. “The data allows us to better inform runners on what they’re doing.”
While apps allow you to record exactly how many kilometers you’ve run in a given pair of shoes, and when a runner accesses their Nike Plus profile from a desktop computer, the page includes links to purchase merchandise. But online marketing consultant Trevor Turnbull says emailing a runner a reminder to buy new shoes constitutes a major breach of etiquette.
Instead, he says, the apps create sales and marketing value indirectly by creating a connection with the brand behind the app, and by encouraging users to run more.
“They’re trying to create a really intimate experience with the end consumer,” says Turnbull, president of the marketing firm WP Authorities. “People become loyal and attached to a brand because you’re creating value. It just happens to be the more you run, the more shoes you’re going to buy. That’s the spinoff.”
Apps that build communities of runners take on increasing importance as the competition for customers intensifies.
According to SportsOneSource, a sports retail analytics firm, Nike retains a 58.9 percent share of the U.S. running shoe market, followed by Asics with 13 percent and Adidas with just over 10 percent.
Under Armour has moved aggressively since entering the running shoe market, carving out a 2.3 percent share and marketing products like the SpeedForm Apollo, a premium runner that will retail for a relatively modest $100 (U.S.).
“This may very well be our next defining product,” Under Armour CEO Kevin Plank told investors during a January conference call. “I’m not ready to claim that it is, but it has that potential.”
Running apps don’t necessarily tie a runner to a brand — anyone with an iPhone can download and use Nike Plus, which displays real-time run metrics on the screen, or relays them to runners via earphones.
The popularity of these apps has exploded, experts say, because they connect with an increasingly wired, data-driven audience, while transforming running from a solitary act to a group pursuit.
“Fitness has become very social, so part of what makes these apps work is that you can share your results,” says SportsOneSource analyst Matt Powell. “There’s a feedback loop to the user, and there’s the gentle nudging to get out and run.”
Rankine says eight years of data from runs worldwide have helped Nike learn runners’ habits and how to influence them. She says, for example that Nike Plus stats indicate runners are relatively inactive on Fridays, so some Nike run clubs have organized Friday runs that end at pubs.
And she says concerns that Nike or another company keeps tabs on your mileage so they can send well-timed ads for new shoes are unfounded.
“There’s an estimated time the shoe will last, but the onus is on the athlete to look at the shoe and figure out if they’re falling apart,” she says. “If you reach 500 kilomtres on your (shoes) the one alert you probably will feel is from your feet, telling you it’s time.”
And while websites and software dedicated to storing run statistics proliferate, running manufacturers are hustling to integrate them into product offerings.
Adidas is currently re-vamping its MiCoach program, while industry newcomer Under Armour recently paid $150 million (U.S.) to acquire Map My Fitness, an online community that boast 80 million users and includes MapMyRun.com.
For shoe companies, embracing run-tracking technology makes sense. These apps give manufacturers valuable data on their customers both as athletes and as consumers. And they facilitate social networks that allow runners to compare and share run data with friends.
But after nearly a decade of Nike Plus and similar programs, what are shoe companies doing with all the information they’ve gleaned?
Experts say they’re not using it to bombard you with marketing messages, though in the long term apps like Nike Plus and MapMyRun can strengthen sales.
But in the short term, says Nike spokesperson Claire Rankine, programs like Nike Plus build brand loyalty while giving companies feedback they can use to improve future products.
“The payoff for us is athletes having access to something that allows them to perform better,” says Rankine, Nike Canada’s director of communications. “The data allows us to better inform runners on what they’re doing.”
While apps allow you to record exactly how many kilometers you’ve run in a given pair of shoes, and when a runner accesses their Nike Plus profile from a desktop computer, the page includes links to purchase merchandise. But online marketing consultant Trevor Turnbull says emailing a runner a reminder to buy new shoes constitutes a major breach of etiquette.
Instead, he says, the apps create sales and marketing value indirectly by creating a connection with the brand behind the app, and by encouraging users to run more.
“They’re trying to create a really intimate experience with the end consumer,” says Turnbull, president of the marketing firm WP Authorities. “People become loyal and attached to a brand because you’re creating value. It just happens to be the more you run, the more shoes you’re going to buy. That’s the spinoff.”
Apps that build communities of runners take on increasing importance as the competition for customers intensifies.
According to SportsOneSource, a sports retail analytics firm, Nike retains a 58.9 percent share of the U.S. running shoe market, followed by Asics with 13 percent and Adidas with just over 10 percent.
Under Armour has moved aggressively since entering the running shoe market, carving out a 2.3 percent share and marketing products like the SpeedForm Apollo, a premium runner that will retail for a relatively modest $100 (U.S.).
“This may very well be our next defining product,” Under Armour CEO Kevin Plank told investors during a January conference call. “I’m not ready to claim that it is, but it has that potential.”
Running apps don’t necessarily tie a runner to a brand — anyone with an iPhone can download and use Nike Plus, which displays real-time run metrics on the screen, or relays them to runners via earphones.
The popularity of these apps has exploded, experts say, because they connect with an increasingly wired, data-driven audience, while transforming running from a solitary act to a group pursuit.
“Fitness has become very social, so part of what makes these apps work is that you can share your results,” says SportsOneSource analyst Matt Powell. “There’s a feedback loop to the user, and there’s the gentle nudging to get out and run.”
Rankine says eight years of data from runs worldwide have helped Nike learn runners’ habits and how to influence them. She says, for example that Nike Plus stats indicate runners are relatively inactive on Fridays, so some Nike run clubs have organized Friday runs that end at pubs.
And she says concerns that Nike or another company keeps tabs on your mileage so they can send well-timed ads for new shoes are unfounded.
“There’s an estimated time the shoe will last, but the onus is on the athlete to look at the shoe and figure out if they’re falling apart,” she says. “If you reach 500 kilomtres on your (shoes) the one alert you probably will feel is from your feet, telling you it’s time.”
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