Microsoft (NASDAQ:MSFT) Regaining Confidence in Consumer Tech Segment

While sales of Kinect aren't that meaningful to the bottom line of Microsoft (NASDAQ:MSFT), the enormous popularity of the accessory and extraordinary sales have repositioned it as a force to be reckoned with in the consumer tech segment.

"Kinect as an important psychological win for Microsoft as it seeks to regain relevance in consumer tech, which will in turn help neutralize the current negative sentiment on the stock," says Jefferies (NYSE:JEF).

Jefferies raised their EPS/revenue estimates for FY11 and FY12 to $2.51/$68.4 billion and $2.74/$73.6 billion from $2.48/$67.3 billion and $2.70/$71.4 billion.

As popular as Apple's (NASDAQ:AAPL) iPad has been, sales of Kinect are soaring at a pace 2.5 times the rate of iPad.

If it continues at this pace, it'll be the fastest growing device in history. At its current pace, it would sell 5 million units over a 50-day period.

Jefferies maintains their "Buy" rating on Microsoft, which closed Wednesday at $27.85, up $0.23, or 0.83 percent.