- Microsoft is aiming to increase its OS adoption from the current 89% market share.
- The Surface book was built to act as a reference point for other manufacturers to create cheaper devices.
- 2016 could be a game changing year for Microsoft.
One could say that Microsoft (NASDAQ:MSFT) has been a 'hibernating' giant of the tech world over the past few years. Obviously, they were still busy serving corporate clients and building on their 89% OS market share with Windows. Arguably, Windows 10 is their most improved operating system. It brings the whole Windows ecosystem together, and provides a uniformal experience, regardless of the device it is being used on. And finally, on high end devices, the Windows 10 experience is comparable to a Mac.
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Interestingly, Microsoft decided to create their own laptop and call it the "Surface book". This device is a premium, high-performance hybrid of a tablet, and laptop. At a starting price of $1499, it is certainly not a device made for the masses. However, Microsoft has created it as an example for other manufacturers to emulate, and bring to market at a cheaper price point.
The fact is the iPad heralded a new era of portable computing. It was the first time that one could have a thin and lightweight device which could be held in any position and allowed for some productivity. As iPad sales decline, consumers want their personal devices to be hybrids; hence smartphones are getting bigger and more powerful.
Hybrid laptops have existed for a while now; however, the experience of using them as a tablet leaves a lot to be desired. And Windows 10 is designed to offer a good user experience at each stage of the computing continuum.
Microsoft's grand plan is to have manufacturers flood the market with devices similar to the Surface book, but offer it at a lower price point in order to gain a wider appeal. Premium devices such as the Surface Pro 4, Surface book, and others will be reserved for corporate environments or for affluent consumers. It is hoped that the end result is increased market share, and dominating the hybrid market before Apple gets there.
The iPad Pro was designed to compete with the Surface Pro. The issue is that it runs iOS, and therefore has limited functionality. When we combine this with the fact that it starts at $799, it is safe to say that it isn't exactly a hot buy this Christmas.
When it comes to stock performance, Microsoft stock has a lot to be proud of. It has enjoyed a huge jump in the latter stages of this year- partly due to the momentum created by the launch of Windows 10 and a new Surface line. Additionally,it has outperformed the S&P 500. Moreover, their healthy net profit margin of 22.67% is something to build on going forward.
The biggest result from Microsoft's announcements in 2015 was that investors were treated to a company that is hungry for success. And with Satya Nadella at the helm and speaking with so much passion, and showing the actions to back up his dream, there is something very 'Steve Jobs eque' about them at the moment. We have seen a Microsoft that is ready to come out fighting, and take the game to Apple.
In conclusion, Windows 10 and Surface aren't game changers for Microsoft just yet. And with the foothold that Microsoft has on the industry, their version of success would be to sell more mobile devices. Due to the fact that Windows 10 apps are being built to run on the mobile platform, it should entice people to give it a try. The issue is that some of the most popular apps are either not available or significantly behind their iOS and Android counterparts.
Previously, Microsoft has been fairly lacklustre in terms of creating excitement during their product launches. With Windows 10 and Surface, they have the right weapons to have a good chance at slaying their competitors in 2016.