Microsoft Downgraded On Mobile Concerns

Shares in Microsoft, Inc. were downgraded Monday by Goldman Sachs analyst Sarah Friar over concerns about the company’s performance in the mobile arena. The investment banking giant downgraded MSFT to a “Neutral” from a “Buy,” and cut the target price on the stock from US$32 per share to $28.

According to BusinessWeek, Goldman Sach’s concern is that Microsoft needs to gain, “a firmer foothold in the growing migration to mobile devices.” Failing that, the company will find it difficult to improve investor sentiment, the firm wrote in a research note.

Though Microsoft posted record revenues and earnings in fiscal 2010, Goldman Sachs doesn’t see a recovery in the mobile market in 2011 because , “Apple’s iPad and iPhone plus Google’s Android operating system are well established.”

On Friday, Microsoft itself revealed concerns about the mobile space in its annual proxy filing with the SEC. In that document, Big Redmond announced that it had given CEO Steve Ballmer half the annual bonus he was eligible for, but that concerns over the failure of the Kin mobile phone and the loss of market share for Windows Mobile resulted in him not getting the other half.

MSFT closed lower Monday at $23.91, a loss of $0.470 (-1.93%), on heavy volume of 96.9 million shares trading hands.


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