For about two decades Microsoft (MSFT) was able to dominate the computing market, embracing and extending its Microsoft Windows operating system to remove profitable competitors, and reaping monopoly profits as a result.
In the era of devices, this has changed, radically. And nowhere is this more evident than with the company's latest effort to enter that market, the Windows Phone.
Despite heavy advertising through the fourth quarter, the company sold 6.2 million units, according to Gartner. Sounds like great news, but this is a market where total industry shipments were closer to 207 million units. So Microsoft has 3% of the market.
The Microsoft of this new market, it's becoming apparent, is Google (GOOG) Android, which according to Gartner got 69% of the market, almost 145 million units. The big winner here, of course, is Samsung, which dominates the Android space. Microsoft is also a small winner here, demanding up to $25/unit from OEMs using Android in their product.
So what is a Windows Phone owner to do? One thing they can do is go to Bluestacks, which is offering an emulator called Get Your Apps Back which, it says, brings Android apps to the Windows Phone platform. Tests show it's what we used to call a kludge, that is, a mess. The company also wants to write an emulator for Windows RT, the version of Windows run on Microsoft Surface tablets.
Of course, if you want Android, buy Android. You can get Android cheap from your carrier. The word for what Bluestacks is doing is sad.
The market is getting the word. Since the start of this year Google stock has continued to outperform that of Microsoft, rising 11% in value against barely 5% for Microsoft. The total market cap of Google, $260 billion, now dwarfs Microsoft's $234 billion. The crossover has occurred only in the last three months, and the difference is growing.
I have written several times that I wanted to see how Microsoft did in the fourth quarter before deciding what to do with my own holdings.
I've sold 'em.
Disclosure: I am long GOOG.