It seems that several times a year, some of my fellow bloggers or journalists feel it necessary to beat up on Microsoft to show the errors of its ways. So when I read a recent article over at the Business Insider, my first thoughts were ‘here we go again.’ We are all aware of how the so called ‘market insiders’ had predicted the death of Apple. But now that Apple is flying high with the introduction of its iPhone and iPad, the market ‘know it alls’ have changed their tune.
The article went on to state the following:
The market still thinks Microsoft’s long-term prospects are pretty good, though. The stock is trading at a respectable 14X P/E. The company has cash flow gushing out of its ears. The consensus is that Microsoft will keep growing, just more slowly.
But the odds are increasing that even this will prove to be wishful thinking.
And there is:
The world has changed radically in the past few years. The Internet has continued to free app-makers from dependency on Windows or any other desktop platform (and, thus, from dependency on Microsoft). Apple’s iPhone has revolutionized the mobile business, unleashing a whole new wave of personal computing devices. Apple’s iPad seems on its way to supplanting the low-end PC business.
Importantly, none of these trends depend in any way on Microsoft’s original monopoly and cash cow, Windows. None of these trends generate so much as a dollar of revenue or profit for Microsoft. (Microsoft is nowhere in mobile. Or tablets. And it is reasonable to think that, in these two huge growth businesses, nowhere is where Microsoft will always be).
I do agree that Microsoft is struggling in the mobile market and that Apple will be the dominant force with its iPhone. As far as tablets go, both Apple and eventually the Google operating system Chromium will dominate the tablet market as well.
In addition, Microsoft buying Yahoo is not going to make the Redmond giant a search favorite, no matter how hard it tries. In another recent article it stated that Google is at about 72% market share. One could conclude that Google will remain the search market favorite for many years to come.