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There have been many noteworthy developments in the technology space recently. Some of these will likely have a material impact on the companies in the sector and the markets they serve.

Microsoft’s New Offerings

Microsoft (MSFT - Free Microsoft Stock Report) has launched a couple of new offerings in the past week. This includes the Windows 8 operating system and Surface, its new tablet PC. The Windows 8 operating system looks to have gotten favorable early reviews, and it appears that the company will find a welcome place on a broad range of computing devices for this introduction. Indeed, PC manufacturers seem to be taking much interest in Windows 8. The Microsoft Surface marks the company’s entry into the tablet market. It will offer a version of the Office productivity suite. This should extend the use of Surface and tablets using Windows 8 from the casual domain into the business environment, a market where Microsoft has traditionally held a significant advantage.

Best Buy’s New Tablet

Best Buy (BBY) is looking to compete with Apple’s (AAPL) iPad and a wide variety of tablets running Google’s (GOOG) Android operating system, with an offering marketed under the company’s Insignia brand. The Insignia Flex Tablet will feature a 9.7-inch screen, 10 hours of battery life, and a dual-core one gigahertz processor. The tablet will run Android 4.0 Ice Cream Sandwich. It will also feature a camera for video conferencing. The Insignia Flex will be introduced in the coming weeks, and is expected to be priced in the range of $239 to $259 per unit. In the past, Best Buy has used its Insignia brand to offer customers less expensive versions of a variety of electronics. Nevertheless, the retail electronics store will continue to carry rival tablets, as it has also done with other electronics in the past.

Facebook’s Pleasant Surprise

Shares of social-network service Facebook (FB) jumped following the company’s third quarter earnings release. Revenues of $1.262 billion advanced nicely over the prior-year results. Monthly active users of 1.01 billion increased 26%, on a year-over year basis. Mobile monthly active users of 604 million advanced 61% from the year earlier. In particular, investors were pleased that Facebook increased revenues from mobile advertisements, which comprised 14% of ad revenue during the September quarter. In addition, the company reduced the percentage of revenue derived from online social gaming provider Zynga (ZNGA), which has experienced difficulty of late. That said, operating costs also increased significantly, and the company posted a modest share loss for the quarter.

Overall, we look for a solid performance from Facebook going forward. That said, top-line growth will probably moderate somewhat, and greater investment in operations could hurt margins. In addition, the ongoing expiration of lockup restrictions allows insiders to sell a large number of shares, which may place downward pressure on this richly-valued stock.

But Several Other Big Names Disappoint

Apple reported disappointing results for the fourth quarter of fiscal 2012 (ended September 29th). Share earnings of $8.67 fell short of consensus expectations, as performance was hurt by weaker-than-expected demand ahead of new product introductions. iPad sales were particularly lackluster, due to high inventories and a slowdown in tablet shipments into the education market. This was partly offset by healthy performances from the iPhone and Mac offerings, and strong sales from Greater China. Still, gross margins were pressured in the quarter. This pattern will probably continue in the December period, owing to the high cost of introducing a number of offerings at the same time. However, component supply constraints have now abated. This, along with a stellar product lineup, ought to benefit the top line going forward. Moreover, margins should improve as we move through fiscal 2013, as production of new offerings ramps up and operating leverage ensues.

Google reported top-line growth of 45% for the third quarter, however profit margins narrowed considerably. The company posted share-net of $6.53, which was a 22% decline from the prior-year figure. This was primarily due to significant declines in average cost-per-click (a measurement of how much advertisers pay Google for each ad clicked on), along with greater expenses. Reductions in cost-per-click are mostly due to increasing customer interest in mobile devices, on which advertising fees are usually lower. Though this has hurt results recently, efforts by Google to expand its presence in the mobile arena ought to pay off down the line. Moreover, the company should continue to benefit from the solid performance of its many established revenue streams.

Shares of Netflix (NFLX) declined following its third-quarter earnings release. The top line advanced at a moderate clip, as domestic subscriptions increased 17% from the prior-year period, to 25.1 million. The number of foreign customers nearly tripled, to 4.3 million. However, subscription growth was slower than consensus expectations. Overall, third-quarter additions of 1.2 million were near the low end of the company’s forecast. Share net of $0.13 exceeded our estimate, but was well below the prior-year tally. The company now expects to finish the year with between 26.4 million and 27.1 million domestic streaming customers. This represents net additions of around 5 million or so, compared to the more optimistic 7 million in additions that had been forecast as a best case scenario. Looking forward, Netflix remains well positioned in its market, and should continue to benefit from the popularity of its streaming offering. However, several well-established competitors have begun to encroach on its business, and we expect more new entrants in the coming years. The streaming business should continue to increase in importance going forward (relative to Netflix’s DVD operation). But streaming lacks significant barriers to entry, which means new entrants and lower profit margins are possible.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.