Google Inc (NASDAQ:GOOG) makes most of its money from advertising, so it doesn´t need to worry too much about selling hardware or software for a profit. Instead, the company needs to make sure it retains a big portion of the traffic in the mobile revolution. That´s why Google allows hardware manufacturers to freely use its Android operating system, and it also builds enormously popular applications for iOS like Gmail, YouTube, Maps and Search among many others.
Android is the leading platform in smartphones, and it has been rapidly gaining market share in tablets too. As if that weren´t enough, Google builds many of the most popular iOS applications, so Google Inc (NASDAQ:GOOG) looks exceptionally well positioned for the death – or transformation – of the PC.
Apple Inc. (NASDAQ:AAPL) has benefited enormously from innovative products like the iPhone and the iPad. Although growth in smartphones has materially slowed down, tablets still offer plenty of potential for the company, especially the much-successful iPad Mini.
The company will probably need to accept lower profit margins in order to effectively compete versus low cost Android devices, but Apple Inc. (NASDAQ:AAPL) has a sticky ecosystem, strong brand differentiation and loyal customer base, so it has good chances to continue thriving in the new computing world if it plays its cards well.
Microsoft Corporation (NASDAQ:MSFT) is in a more complex situation, the company is still a major player when it comes to productivity, but it hasn´t been able to gain much market share in tablets or smartphones. Windows 8 is a well-intended move aimed at inserting Microsoft in the new paradigm, but the product has not gained much traction among consumers so far. Time is running out, and Microsoft Corporation (NASDAQ:MSFT) needs to adapt to the post-PC world if it’s going to remain a relevant player in the tech industry.
Bottom line
The PC is dying, or changing; however you want to say it, the computing industry is going through a major transformation. Both Google Inc (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL) are not only responsible for this change, they look well positioned to continue profiting from it in the long term. Microsoft, on the other hand, is facing a serious challenge, and the company needs to prove to investors that it can adapt and thrive in the new computing paradigm.
The article Investing to Profit From the Death of the PC originally appeared on Fool.com and is written by Andrés Cardenal.
Andrés Cardenal owns shares of Apple and Google. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Andrés is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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