A story ran on Bloomberg news today that Microsoft won a 500,000 seat deployment at the U.S. Census Bureau for Windows Mobile. I'm surprised this story isn't getting more play, particularly because Windows Mobile isn't generally bandied about by the investment community as a potential growth driver in the next 24 months.
From that article:
Microsoft, the world's biggest software maker, plans to unveil the deal today, general manager Scott Horn said in an interview. Redmond, Washington-based Microsoft expects to increase its mobile unit's sales to $1 billion in one to three years, from $337 million last year, and break the dominance of Research In Motion Ltd.'s BlackBerry.
Granted, $337 million is but a fraction of Microsoft's revenue base (1% for rounding purposes), if they can successfully grow that business into a $1B+ franchise over the next few years, it would be meaningful to the stock given the margin structure of the mobile OS contracts, in my estimation.
With MS powering the new Treo (which gained share last quarter), could Microsoft finally be ready to give RIM Blackberry a real run for its money?
Note: At the time of this writing I, and/or funds I maintain discretionary control over, maintained a long equity position in MSFT but did not maintain a position [long or short] in RIMM.
This is basically a no brainer. RIMM's software business is toast in under 24 months. They have to start giving it away because MSFT is giving away their stuff as part of Exchange. No way RIMM can keep pace with the huge variety of Windows Mobile handsets either. RIMM will still be around, but they will be the Notes of Smartphone software.
Posted by: Bill Burnham | April 04, 2006 at 11:29 PM