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Microsoft Roundup: Hardware Leak, Cashier-less Shopping, Office

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Leaked documents showed what could be Microsoft’s (MSFT - Free Report) hardware plans to 2020, new technology competing with Amazon Go and Office enhancements constituted the top Microsoft stories from last week. Here are the details-

Leaked Internal Documents

Leaked internal documents revealed Microsoft’s hardware plans when Terry Myerson headed the Windows and Devices Group. With his departure a couple of months back, it’s possible that the plans have changed. But since it’s also likely that they haven’t, it’s worth taking a look-

Microsoft expects to launch three pieces of hardware this year, the first being a cheaper tablet called Libra (Microsoft hasn’t given up on these especially considering the prospects in the academic market); the second is the next version of the Surface Pro called Carmel that goes up against Apple’s (AAPL - Free Report) iPad; with the third being a dual screen foldable device called Andromeda that OEMs will later build themselves (like the Surface Pro). This appears to be a new device category but it isn’t clear what it might be used for.

In 2019, Microsoft is planning a lighter, more comfortable version of Hololens with a better display called Sydney. It may also use a new sensor package and Microsoft’s custom processor.

2020 will bring the next Xbox, which is likely to be a family of devices rather than a single piece. It will be called Scarlett. This will take on the next PS from Sony (SNE - Free Report) .

Microsoft Working On Competition For Amazon Go

Microsoft is not a company you think about when you think of retail although the company does have retail customers that use its productivity and cloud solutions. But the company is now working on some technology that retailers are bound to take notice of. It is using cameras and sensors inside shopping carts that communicate with its cloud to facilitate cashier-less shopping. Since any retailer could theoretically use the technology, the Amazon Go concept that the leading online retailer launched recently may not be so unique to Amazon (AMZN - Free Report) for long.

Microsoft is reportedly in talks with Walmart to adopt the technology. The attraction for retailers is obviously the cost cutting opportunity, as well as the opportunity to appear as cool as Amazon.

There are three challenges for retailers: The price has got to be right because they don’t have a lot of margin to sacrifice. It also can’t result in too many job cuts or there will be a backlash in the form of strikes and subsequent negotiations with trade unions.

And finally, the inability to interact with the cashier or store personnel may not be what some shoppers want. They might need help, or simply be averse to technology. So retailers have to ensure that technology adoption isn’t detrimental to customer experience. Therefore, the fully automated Amazon Go concept that Amazon is employing in new stores may not be best suited for existing retail outlets.

Accepting some form of automation without going it all the way like Amazon Go may be just what they need, in which case Microsoft’s solution would be attractive.

Office Makeover

Microsoft announced three new features to improve Office.

The first was a simplified command ribbon, including certain basic features while hiding others. Users can however pin other functions to it or delete functions they don’t use. They can also simply go back to the old ribbon with a single click.  

The new icons make it easier to understand what functions they enable, hovering over a file on the Office website makes it appear to pop forward. There are small changes inside documents as well, such as comments that change color when you hover over them.

Third, Microsoft is bringing search to the center of the experience, enabling access to commands, content and people. It’s also bringing what it calls ‘zero query search’ that uses AI and the Microsoft Graph to recommend searches intuitively.  

 

Recommendation

Microsoft shares carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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