Technology Sector 10/2

Hey all,

Here is my update.

Microsoft (MSFT) - $27.35

Zune The Zune mp3 player is going to cost $250 and is going to come out on November 14th. It is going to be equipped with wireless capability and it will be able to play videos. MSFT will also be offering a subscription service where users will be able to listen to 2 million songs for 14.99/month. The price makes it competitive for a 30gig player, and I think the wireless sharing and built in FM radio tuner give it a bit of an edge over the Ipod. I think Apple will be a bit scared by the Zune, mainly because of the fact that Microsoft are sure to enable the Zune to seamlessly work with the Xbox 360, Windows, and Soapbox (MSFT's Youtube killer). Just remember that Windows has a 90% share of the operating system market, this will be a big deal for the Zune.

Xbox 360 News (slightly unnecessary but I love games)
- GTA4 exclusive downloadable content
- Next Splinter Cell is 360 exclusive
- New Banjo-Kazooie (game was great on the Nintendo 64)
- Marvel Universe Online exclusive for the 360 - created by City of Heroes developer (massively popular game for the PC)
- Halo Wars in development - it is being developed by Ensemble Studios - the creators of Age of Empires
- Mid November release for the $199.99 HD DVD player add on for the Xbox 360

I think the Xbox is looking strong going into the Holiday season. I am very excited to see how this console "war" is going to pan out, but I expect both the 360 and the Nintendo Wii to come out as the winners.

Vista
Seeing as Windows/Office account for over 60% of Microsoft's revenue Vista is an extremely important new release. There wasn't anything huge related to the product in the past few weeks, but look for more information as we approach the release date.

Dell (DELL)

I had mentioned in a previous meeting that Dell is looking like a good buy at around $22/share. I'm starting to reconsider. HP is gaining on Dell, and I believe Dell's retail store move may turn out to be a mistake. Anyone remember Gateway and their retail stores? Dell is planning to open upwards of one hundred locations in the next year/year and half. I honestly don't see the added value in being able to customize a PC instore. It is not like you'll be able to walk away with your PC right then and there, you will still have to wait for it to be shipped to your house. I think perhaps waiting a few more weeks and reading some more articles about the restructuring will be beneficial.

Rob Crowther