Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

How Apple Inc. (AAPL) and Google Inc (GOOG) Are Killing Microsoft Corporation (MSFT)

Page 1 of 2

In business, as in life, the only constant is change. Major trends enacted by Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG), and others in the tech industry represent a serious threat to Microsoft Corporation (NASDAQ:MSFT)‘s business model.

Mobile revolution
Microsoft Corporation (NASDAQ:MSFT) has been mostly a software company, selling Windows and Office to different hardware manufacturers or end customers; this meant that the company was in a very convenient strategic position. While hardware was a tough business with little room for differentiation and low profit margins, software was different.

Windows and Office were remarkably dominant in the times of the booming PC market and Microsoft Corporation (NASDAQ:MSFT) benefited from strong network effects. Selling software on a large scale can be tremendously profitable too; once code is written it can be sold to another customer for a marginal cost. The company had the best of both worlds: a dominant market share and big fat profit margins.

The Next Battleground for Apple Inc. (AAPL) and Google Inc (GOOG)?Apple Inc. (NASDAQ:AAPL) has always followed a different strategy, Steve Jobs intensely believed in integrating software and hardware to build superior products, and this has proven to be a successful approach in the first stages of the mobile revolution.

As mobile expanded to emerging markets, however, costs considerations became increasingly more important to the average consumer and Google Inc (NASDAQ:GOOG) leveled the playing field by allowing manufacturers like Samsung and HTC to use its popular Android operating system for free.

Both in smartphones and tablets Apple Inc. (NASDAQ:AAPL) is still the high end leader, but competitors have reduced the technological gap and lower-priced Android devices have been rapidly gaining market share over the last quarters.

Microsoft Corporation (NASDAQ:MSFT), on the other hand, has achieved lackluster results in mobile so far: According to IDC, the Windows Phone platform had a market share of 3.7% during the second quarter of 2013, well behind Apple Inc. (NASDAQ:AAPL)’s iOS with 13.2% and Google Inc (NASDAQ:GOOG)’s Android with 79.3%. The company also had to take a $900 million inventory writedown in the last quarter due to disappointing sales of its Surface tablets.

Declining PC market
According to Gartner, PC shipments declined by 10.9% in the second quarter of 2013, this was the fifth consecutive quarter of declining shipments, the longest period of falling PC shipments in the industry’s history. Tablets are replacing PCs, and there is no end in sight for that trend.

When it comes to business users and other tasks that require heavy computing power, a PC is still irreplaceable. However, if you are watching videos, reading, engaging in social networks, or checking emails, there is really no need for a PC and a tablet provides a superior experience.

The distinction between PCs, tablets, and smartphones is becoming increasingly outdated in a time in which the rise of cloud computing means that everything is stored online and easily accessible from different devices at any place at any time.

Google Inc (NASDAQ:GOOG)’s Android is commoditizing operating systems in the mobile era, and this does not bode well for Microsoft Corporation (NASDAQ:MSFT) and its Windows business.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!