In a stock market that is dominated by technology companies, Microsoft (NASDAQ: MSFT), once the most valuable company globally, now ranks in fifth position falling behind nemesis Apple (NASDAQ: AAPL), which garnered the coveted number one position in August of 2012. To add insult to injury, as of October 2012, Google (NASDAQ: GOOG) had also surpassed Microsoft, slipping decisively into fourth place. It appeared as though software Goliath Microsoft was fast becoming a victim of the mobile device era. Lethargic PC sales aside, a large portion of the losses were attributed to direct competition with Apple and its avant-garde iPad devices. These days’ people are enamored with anything handheld and Microsoft finds itself in the unpleasant position of playing catch-up with its nearest competitors.
Microsoft is fighting back with the introduction of their highly anticipated Surface tablet. The company is hoping that their hybridized cross between a tablet and a PC will be the definitive iPad killer, but unfortunately, it’s not looking that way. At $499 a pop, consumers are finding it too expensive when there are cheaper, comparable models on the market. With the high price, some analysts speculate that the Surface was more about placing Windows 8 in the mobile world than killing off the iPad. Whatever the angle, this is the first time that Microsoft has developed and marketed its own Windows based gadget rather than designing ground-breaking software for another company’s hardware. Microsoft is now in unequivocal competition with partners such as Dell (NASDAQ: DELL) and Samsung (PINK: SSNLF) which both have hardware that runs on the Windows operating system.
Microsoft is by no means in poor health. PC sales may be down at the moment, but sales are healthy in other areas, such as the Windows system and the Xbox game console. Microsoft’s genius has produced some of the best software in history and the conglomerate was built on the backs of the PC and on its ground-breaking software. The company is the leader in desktop operating systems and no other company can even come close to producing the software that Microsoft has unleashed over the years. This is a company that has literally changed the way we live.
So is Surface a real iPad killer? Not yet. It’s battling the Apple gadget in equal pricing territory. Experts also point out that it does not have the quality of the Apple product or the needed hype. Reviews of the tablet have been low key, praising hardware more than software. Perhaps it was all about Windows 8.
Microsoft is still a great investment for many reasons. The release of the Surface may yet boost sales enough to compensate for the 2.4 percent loss in PC sales last year. The company has managed to reinvent itself many times in order to keep up with or stay ahead of the competition. Microsoft is still betting that they can make an impact with their version of a tablet and that consumers will fall in love with it and the new Windows 8 operating system.