Is Microsoft Corporation (MSFT) Waking Up Too Late?

Page 1 of 2

Microsoft Corporation (NASDAQ:MSFT)On July 11, Microsoft Corporation (NASDAQ:MSFT) announced a realignment of its company along the lines of function instead of product line. Microsoft hopes that these functional teams can collaborate on developing products that can compete with the likes of the Apple Inc. (NASDAQ:AAPL)’s iPad and iPhone, as wells as the Google Inc (NASDAQ:GOOG) Nexus tablet and Android smartphone. Unfortunately, it seems that Microsoft may be waking up too late.

Way behind

Microsoft Corporation (NASDAQ:MSFT) resided in an embarrassing sixth place in tablet shipments during Q1 2013, owning a dismal 2% of the market. Apple Inc. (NASDAQ:AAPL) maintains market leadership with a 39% market share. In an act of desperation Microsoft cut the price of its Surface RT by $150 to spur consumer interest. In fact, Microsoft had to take a $900 million charge in its most recent quarter stemming from inventory adjustments on its Surface RT.

In the most recent quarter, Microsoft Corporation (NASDAQ:MSFT) experienced an increase in revenue of 10% due to its new product cycle, versus Apple’s 11% increase. Google Inc (NASDAQ:GOOG) blew past both of them with a 19% increase in revenue. Over the long-term it will most likely be a fight between Apple Inc. (NASDAQ:AAPL) and Google in terms of tablet and smartphone market leadership, with Microsoft in last place as a fading tech name.

Currently, Microsoft’s chief core competency still resides in operating and productivity software on PCs. With PCs on the endangered species list and the world moving toward a cloud-internet-app consuming marketplace, Microsoft Corporation (NASDAQ:MSFT) not only needs new products but a new way of thinking in order to move the needle on its place in the new tech paradigm.

Cultural shift

Based upon the restructuring announcement, you could infer that Microsoft’s product divisions kind of operated on their own without much interaction with other divisions. Each division even sported its own procedures and financing. This created too much bureaucracy.

Steve Ballmer realized that he needed to re-invigorate Microsoft Corporation (NASDAQ:MSFT)’s mojo by encouraging entrepreneurial drive among employees. An entrepreneurial culture seems to work for other big companies such as The Coca-Cola Company (NYSE:KO) and Starbucks Corporation (NASDAQ:SBUX) as they encourage stakeholders to develop product ideas of their own. His statement in the most recent quarter serves as proof of his belief in this new approach,

Our new products and the strategic realignment we announced last week position us well for long-term success, as we focus our energy and resources on creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value the most.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Biggest Airports in the World

The 5 Most Gang Infested Cities In America

The 34 Smartest Countries in the World

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

Subscribe

Enter your email:

Delivered by FeedBurner

X

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!