Microsoft Corporation (MSFT): Will It Be Obsolete By 2017?

For situations where portability is unnecessary or processing power is important, the PC is clearly the superior device. There are plenty of places or applications where this is in fact the case. Some quick examples are universities, office buildings, programming, graphic design, research, high end gaming, etc. Even if Microsoft never becomes relevant in mobile, the company will not become obsolete as a result.

Windows on tablets

In addition, while Microsoft might be hopeless in smartphones because of Android, Microsoft has a chance in tablets. Tablets became popular recently so the market saturation is not as high as it is with smartphones. Apple is the leading vendor in tablets, and the company only shipped 23 million iPads in the holiday quarter. In total, the number of smartphones that shipped worldwide was approximately four times the number of tablets that shipped. It is much easier to attract new customers than it is to convert a customer from Android or iOS.

Also, tablets are larger and more powerful than smartphones. Thus, Microsoft can use Windows’ millions of legacy programs in the tablet battle. Windows has been around much longer than Android and iOS and the number of programs written for it dwarfs the number of Android and iOS apps. While Windows 8 tablet adoption has been disappointing, legacy programs might be enough to negate Android’s free licensing and eventually gain Windows 8 or a later iteration a large portion of the market.

The bottom line

The emergence of smartphones and tablets does not make the desktop PC or Microsoft obsolete. Mobile devices are vastly inferior to desktops in processing power and there are plenty of applications where processing power is important. Permanent decline happens to obsolete technology, and the desktop PC is not obsolete. Also, Microsoft has a fighting chance in tablets and has a big place in servers and console gaming, which are far from being irrelevant. Even if Microsoft never becomes relevant in mobile, the company and the PC will continue to be relevant for a very long time.

Alvin Gonzales owns shares of Microsoft. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft.