Updating Estimates as Microsoft Decides to Scrap New Zune Models

Trefis submits: Microsoft (MSFT) competes with Apple (AAPL) and

Trefis submits: Research in Motion (NASDAQ:RIMM) announced its fiscal year Q1 2012 earnings, in which it provided a bleak revenue outlook for Q2 due to delays in new product introductions. [1] The results for Q1 were also well below the previous guidance provided by RIM, which is causing investor confidence in the stock to collapse.

Trefis submits: Microsoft (MSFT) dominates the markets in which it competes, in particular the operating systems where Windows has 75% PC market share and the business productivity market where Office has 95% share by our estimates.

Trefis submits: The average price of Microsoft’s (NASDAQ:MSFT) gaming console Xbox is falling, and we expect this trend to continue in light of competition from Sony’s (NYSE:SNE) PlayStation and Nintendo’s (NTDOY.PK) Wii and DS gaming consoles.

Trefis submits: Microsoft’s (NASDAQ:MSFT) new Windows 7 operating system helped the company gain about 1% market share during the past year. We estimate that Microsoft operating system market share increased from 73% to 74% during 2009.

Trefis submits: We estimate that the Sansa MP3 player business of SanDisk (SNDK), where the company competes with Apple (AAPL) and Microsoft (MSFT), contributes only about 2% to the value of SanDisk’s stock.

Microsoft Corp is cooler than you might think. A Reuters/Ipsos poll found that just under half of 853 respondents between the age of 18 and 29 thought Microsoft is cooler now than it was a year or two ago.

By Trefis: For the past 10 years, Microsoft's (NASDAQ:MSFT) stock has traded in a relatively tight range of $20 to $30. According to our estimates, however, Microsoft is currently worth around $41/share, implying a premium of about 40% to the market price. In contrast to our forecasts, we think the market expects Microsoft's market share for the OS and Office divisions to decline.