One would have thought securing the distribution for your new smartphone operating system with the biggest smartphone OEM in the world, addressing one of the biggest concerns shareholders had about the company’s mobile strategy, would have had some impact on Microsoft’s (MSFT) share price.
If fact the opposite appear to be the case, with share price down from a peak over the new year, and down close to 1% on the announcement of the deal on the 11th.
The reasons for this is somewhat hard to explain, but appear to center around lack of confidence in the ability of Microsoft to execute, despite recent successes like Kinect and the resurgent Xbox 360, which in US has been the only console to see growing sales in the last quarter, and the successful launch of Windows phone 7. This perception is widely prevalent in the media and amongst analysts, and likely based by being overshadowed by the performance of Apple (AAPL), who find their ventures ironically boosted by the confidence the media and market place in their ventures, despite high profile failures such as Apple TV, Ping, MobileMe and most recently the launch of the iPhone 4 on Verizon.
How can Microsoft address this perception. It may require something as radical as a change of leadership. Alternatively a much less radical but likely expensive route would be to significantly increase marketing around the brand, highlighting the successes of the company.
Lastly, of course the best way to breed confidence is successful consumer products, and not just one but a sequence of them, close enough together to change the perception of the company.