Microsoft Shares Not Likely to Benefit from Windows Phone (MSFT, GOOG, AAPL)

One word for Windows Phone 7 -- lame.  If you can't beat prices that use Google's (GOOG) Andriod or Apple's (AAPL) magnificent iPhone, why bother?  That's why Microsoft's (MSFT) latest venture is going to be a disappointment for those hoping its going to raise the sagging stock price.

Windows Phone 7 phones are also expect to sell for roughly $200 with contract.   There are a number of Google Android phones that are similarly priced, but there are also models that cost significantly less. AT&T (T), for instance, offers the Samsung Captivate for $60 with a contract. Apple fans, meanwhile, can purchase an iPhone 3GS for $99 with an AT&T contract. 

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Over the past 12 months Microsoft Corp (MSFT) shares have traded between $22.73 and its 52-week high of $31.58.  Microsoft shares are now trading with a P/E Ratio of 11.8 and EPS of 2.11.  That may make the stock seem cheap, but its dead money when you have to impact a $219.3 billion market cap with something new and inventive -- windows phone 7 will not be that catalyst. 

MSFT shares have moved up 10.3% from its 52-week low but expect a slow increase if anything, and it could get worse if the company doesn't come out shinning on its Oct 28th earnings call.   Here's more boring news on Windows 7 via informationweek.com -- Windows Phone 7 Smartphones Too Pricey?

(InformationWeek.com | Paul McDougall ) Analyst says Microsoft will have a tough time competing with rivals unless its partners roll out cheaper versions of devices based on the new mobile OS.

Microsoft and its partners will have to develop lower-cost versions of Windows Phone 7-based devices if they're to be competitive with offerings from rival Google, according to one industry watcher.

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Here's a quick demo of the new Windows Phone: