Katherine Egbert at Jefferies & Co. just raised her estimates for Microsoft's Q4 based on the strength of Kinect sales. She is modeling $19.1 billion in revenue, with EPS of $0.69, up from $18.5 billion and EPS of $0.66.

She says the Kinect, "is on pace to be the fastest-selling device of all time." This is giving  Microsoft "an important psychological win," and "its success may help neutralize the current negative sentiment on the stock."

We're not so sure about that. If Microsoft wants an important psychological win it needs to announce Windows Phone 7 is blowing the doors off. Or it needs to lay out a coherent strategy for tablets. That would get people really excited.

But, we do think Kinect is a nice story for Microsoft and one of the biggest winners in tech for 2010.

Here's the key points of her note:

Event

Calls to 55 major retail outlets in the US indicate Kinect is largely sold out.

Key Points

Raise estimates due to Kinect sales strength. Microsoft has said it will sell through five million Kinect units this quarter, and our retail checks confirm widespread unavailability of the new technology. We have raised our December quarter revenue/EPS estimates to $19.1Bn/69c from $18.5Bn/66c. The $600mm increase is due to sales of Kinect sensors, Xbox 360 consoles, and Kinect software games. For FY11 (June) we now estimate $68.4Bn/$2.51 vs $67.3Bn/$2.48, and for FY12 we estimate $73.6Bn/$2.74 vs $71.4Bn/$2.70.

Kinect appears to be the fastest-selling device ever. It is selling at 2.5x the rate of the iPad since debut: Kinect is on track to sell 100,000 units per day through Christmas (five million units over 50 days); the iPad sold 1mm units in the first 27 days it was available. However, Kinect sales are likely to slow post the holiday season. Still, the technology has applicability beyond gaming, and we see Kinect as an important psychological win for Microsoft as it seeks to regain relevance in consumer tech.

http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/12/15/businessinsider-microsoft-getting-an-important-psychological-win-with-kinect-2010-12.DTL

Amazing.

amazing indeed....

I agree on both parts.  Kinect is selling strong and should continue well into next year.  Also MS needs to do something about their strategy in Phone and Search, the throw everything against the wall and see what sticks strategy isn't going to beat google or apple for that matter.

Kinect is selling amazingly and that will continue for a long time!

but... iphone 4 sold 16.5million in 3 months (in the summer period). Kinect has sold 4 million in a month at christmas. How is it even close to the fastest selling device of all time? 

it really is odd? its saying device so i cant see how they dont count too? maybe the people who write this news really does hate Apple? lol

Iphone 4 is not a new device, its an upgrade of the iphone 1.

And Kinect is not standalone.

It's an upgrade for the XB360.

As usual this "fastest selling device of all time" is with congrete restrictions, i don't know or care.

Amazing sales for Kinect, that's for sure. And way higher than i thought (3M till end 2010).

Just more amazing regarding this is just because of US sales, MASSIVE sales, and no support from the asians.

How far can it go?

15m, 20m or way higher than that?

12-14 Million this will phase will be over by summer 2011,

its still a device that sold so how many units in a space of time, that vastly outsold Kinect. im not bashing Kinect at all. but just saying i dont understand this news