Subsides Needed to Spur Adoption of Windows Tablets (MSFT)

Yesterday Microsoft (NASDAQ: MSFT) held its Build developer conference. During the event, Microsoft said it was targeting smaller form factors devices, including a Windows 8 tablet with an 8.1 inch screen.

Commenting analyst Heather Bellini of Goldman Sachs said, "Addressing this market is critical given the faster unit growth in the sub-9.7 inch screen form factor segment. With that said, we continue to believe that Microsoft may have to employ additional strategies to help spur demand for Windows tablets, including potential subsidies."

"While we view the announcements today as an incremental positive for Microsoft, we continue to believe the company needs to aggressively try and spur adoption of its new mobility offerings while at the same time slow down the rate of secular decline in consumer PCs. While the enterprise-related business provides solid ballast, we believe revenue and earnings will continue to be biased lower," added Bellini.

Goldman Sachs has a Sell rating on Microsoft with a price target of $30.00.

For an analyst ratings summary and ratings history on Microsoft (NASDAQ: MSFT) click here. For more ratings news on Microsoft click here.

Shares of Microsoft closed at $34.35 yesterday.

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