Sell Microsoft (MSFT)

I’m going to take advantage of the half-hearted bounce this week to sell Microsoft (MSFT) out of Jubak’s Picks. (For more on this bounce, see my post http://jubakpicks.com/2010/06/10/return-of-son-of-bounce/ )

The stock has not performed well on up days for the market and looks locked into a short-term downtrend. (On the chart Microsoft is flirting with a negative cross-over where the 50-day moving average breaks below the 200-day moving average.)

 I might want to own this one in the fall again when visions of higher sales for the Vista operating system and for Office 2010 start to dance in investors’ heads.

Update Microsoft (MSFT)

The earnings news out of Microsoft (MSFT) yesterday, April 22, after the stock market close in New York, was good but good isn’t getting investors very excited these days. Unless a company delivers great earnings and ups guidance as well, shares have been selling off on just good news this quarter.

That’s the way this market is expressing its nervousness about the Greek debt crisis, monetary tightening in China, and the uncertainties of Wall Street reform during this earnings season.

And so Microsoft shares dipped on its earnings report in the market’s after-hours session and were up just a nickel on the open in New York even though the company is growing just the way that investors in the stock, a Jubak’s Pick in July 2009, had hoped.

Update Microsoft (MSFT)

Microsoft (MSFT) reported fiscal second quarter earnings on January 28.

The really good news for investors was what wasn’t in the blowout numbers. And what’s happened to the company’s business since then.

The second quarter results were good enough on their own. (Microsoft’s fiscal year ends in June.)

The company reported earnings of 60 cents a share. Once you added back in $1.7 billion in deferred revenue and about 14 cents a share in earnings from sales of Windows 7 that Microsoft decided it would recognize in future quarters the earnings picture looked even better at 74 cents a share. Wall Street analysts had included that deferred revenue in their estimates of 59 cents a share for the quarter. That made this is a 15 cents a share earnings surprise.

The company attributed the surprise to better than expected sales of its new Windows 7 and Windows Server 2008 R2 software launched in October. Through the second quarter Microsoft had sold 60 million Windows 7 licenses, making it the fastest selling operating system in history, according to the company.

But what’s really interesting for investors who want to know not what Microsoft did in the quarter but what the stock might do going forward is that the company reported it still hadn’t seen a significant contribution to sales from corporate—known as enterprise—purchases of Windows 7.

Has Apple blown it? Did the company squander the competitive chance of a lifetime?

I know Apple (AAPL) is an investor darling trading near an all-time high.

And I know the company’s products have tremendous consumer cache. So much so that the company is able to sell its iPhones and iMacs for prices well above those charged by competitors.

But it still looks to me that Apple has missed its chance. It had a limited window of opportunity when competitors such as Microsoft (MSFT) couldn’t do anything right and it didn’t turn that opening into a big enough share of the personal computer market. It was first to market with a game-changing smart phone but the company has pursued a high-end niche strategy with the iPhone that has left the door wide open for Google (GOOG) to grab for the mass market.

If this is as good as it gets for Apple, the company has no one to blame, finally, but itself. The opportunity was there and Apple didn’t exploit it as ruthlessly and as relentlessly as it needed to.

Here’s my basic problem with Apple’s strategy and execution: The company didn’t kick ‘em hard enough when they were down.

Apple and Google go head to head in China’s mobile phone market

Ladies and gentlemen. In this corner, wearing the Macintosh red trunks, Apple (AAPL) and its partner China Unicom(CHU)

In the other corner, wearing the Chrome trunks, Google (GOOG) and its partner China Mobile (CHL).

That’s the lineup that’s about to cross gloves in China’s smartphone market later this year, according to The Financial Times.

Apple is days, weeks, months away from signing an exclusive, three-year deal with China Unicom, the country’s No. 2 wireless operator, for its iPhone.

Google is about to launch a line of smartphones based on its Android operating system with China Mobile, the country’s biggest wireless operator.

At stake is not just China’s wireless market but momentum in the global battle over smartphones.