Microsoft's (NASDAQ:MSFT) Kinect Connects, Windows Doesn't

For the first time in its history, Microsoft (NASDAQ:MSFT) has a serious contender to its core desktop business, and it appears it's not going to go away anytime soon. We're talking about tablets of course, which should be a major disruptor in Microsoft's universe.

FBR says, "We maintain our MP rating as we (1) remain skeptical about a strong enterprise PC refresh cycle, 2) believe the emergence of tablets will adversely affect the company's core desktop franchise, and (3) evaluate the company's last legitimate effort to becoming a meaningful player in the vital mobile market.

"We are raising our F3Q11 (Mar) revenue and EPS estimates to $16.5 billion and $0.59 from $16.1 billion and $0.54. We are raising our FY11 revenue and EPS estimates to $70.1 billion and $2.62 from $68.5 billion and $2.43. We are raising our FY12 revenue and EPS estimates to $73.9 billion and $2.84 from $73.1 billion and $2.67."

FBR reiterated their "Market Perform" on Microsoft (MSFT), which closed Friday at $27.75, down $1.12, or 3.88 percent. FBR increased their price target on the software giant from $28 to $30.