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Apple Inc. (AAPL), Microsoft Corporation (MSFT): The Mobile Focus

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Apple Inc. (NASDAQ:AAPL)NPD group suggests that tablet shipments will increase by 67% in 2013, and will mark the first year that tablet shipments outpace that of notebooks. Notebook sales are predicted to fall 10% (from 203.3 million to 183.3 million) by 2017. Tablets? They are only expected to grow from an estimated 256.6 million this year to 579.4 million in 2017. What companies will be most effected by this movement to mobile devices, and what value do these companies currently provide?

There are a few major companies that have seen shipment numbers increase, but some have seen market share slip into the hands of their competitors. The graph below shows how much Apple Inc. (NASDAQ:AAPL)’s market share has fallen, despite shipping 800,000 more than what was expected.

Source: IDC

Apple Inc. (NASDAQ:AAPL) still holds more than double the market share of its closest competitor, Samsung, but it lost nearly 20% from one year ago. Notice Amazon.com, Inc. (NASDAQ:AMZN) tripled its sales and increased market share by 0.6% as well. Tablets could very well be the saving grace for some companies that are traditionally known as PC companies. For example, Microsoft Corporation (NASDAQ:MSFT) may have only sold 900,000 units, but this led to 18% more revenue than the same quarter one year ago.

The mobile focus

More than anything, the graph above shows why companies should be focused on the mobile market. Overall, shipments more than doubled in just one year. NPD also predicts that, by 2017, six tablets will be sold for every one PC. In 2012, iPads accounted for approximately 21% of Apple Inc. (NASDAQ:AAPL)’s total revenue. In 2017, it is projected that nearly 28% of the company’s revenue will come from these same devices.

Microsoft Corporation (NASDAQ:MSFT) seems to be headed in the right direction. If it can continue to increase its tablet market share, there is no reason why it won’t successfully replace what is expected to be a bad few years for the PC market. However, there is a glimmer of hope for companies looking to sell touch-enabled notebooks. NPD senior analyst, Richard Shim, said:

The mobile PC industry is undergoing significant change. The rapid rise and establishment of white box tablet PCs is putting pressure on traditional notebook PCs, resulting in cannibalization by tablet PCs. Thus far, Windows 8 has had a limited impact on driving touch adoption in notebook PCs, due to a lack of applications needing touch and the high cost of touch on notebook PCs.

Good or bad?

This can be viewed as good news or bad news. Take your pick – mine is that there is obviously room for improvement, and that is good. I always try to look at the positive side of things, and there is a lot of potential here for Microsoft Corporation (NASDAQ:MSFT). Touch-enabled notebooks are expected to increase 48% in 2014. In fact, it is expected to increase for the next few years, including more than 100 million sold devices by 2015. All of this, from virtually nothing in 2012.

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