Isreal Hernandez, MKM Partners: Reiterates a Neutral rating and a $32 price target. Post the W8 launch priorities are likely shifting from just delivering the software to managing developer and partner relationships and building the universe of applications across multiple devices that will likely be the key to the adoption and commercial success of Window 8, Windows Phone 8, and both Microsoft and partner hardware-requiring skill sets that again we believe were not viewed as Sinofsky's strengths." There has also been speculation that Sinofsky did not manage the relationships well with hardware partners as Microsoft announced that it would be rolling out the Microsoft Surface tablet based on its own competing hardware and that it would offer a non-Intel (ARM-based) version of the OS. While respected for shipping product on time, we believe Sinofsky was not viewed as equally successful in managing relationships with other top executives, customers, partners and developers, and that these issues in the end blocked his path forward. In fact with the launch done and developers now focused on the next product cycle, we believe this was viewed as the right time for a leadership transition. "While investors will ask if Sinofsky's departure is a negative sign for the Windows 8 launch, that seems unlikely given W8 launched just over two weeks ago. Michael Turits, Raymond James: Reiterates an Outperform rating. We don't think the move is a reflection on the success of Windows 8 one-month after its release. We think the move will weigh on the stock near-term. Ballmer has no plans to turn over the reins as Microsoft's CEO for the next several years, despite press speculation to the contrary. Sinofsky had previously driven successful Office releases, and the turn-around of Windows 7 after Vista, and we are of the view that the move is a loss to Microsoft. "We hold Sinofsky in high regard as a technical visionary and his ability to deliver complex products on a timely basis. Rick Sherlund, Nomura Equity Research: Reiterates a Buy rating and a $37 price target. Tami Reller will assume all business operations, increasing her duties from finance and marketing of Windows." She was one of Sinofsky's direct reports and a well-known user interface expert. We note several examples where Microsoft could have coordinated better internally with Win8 including developer APIs that changed until RTM, an embedded Office for WinRT release that shipped as a "preview", lack of major first party games for Win 8 (where is Halo RT?) and hardware OEMs that were kept in the dark on Surface and to some extent WinRT development overall Julie Larson-Green will take over development. Microsoft seems to have chosen teamwork, assuming the deep engineering bench can pick up the slack. We view this change as a negative, as execution in Windows has been good under Sinofsky's leadership and a change either signals or could cause issues at this critical time Teamwork and collaboration within Microsoft is increasingly important when up against Apple that brings a complete solution, but products must be high quality and on time. Walter Pritchard, Citigroup: Reiterates a Buy rating and a $35 price target, calling this akin to "changing quarterbacks in the middle of the playoffs." "we had assumed Sinofsky (with all his known pluses and minuses), having spearheaded the new vision for Windows, would be there to see the execution through. However, from the tone of the reports, though there is a suggestion parts of the Windows ecosystem lagged under Sinofsky:
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