Oh the irony of how a stock moves! The journeys of both Microsoft (MSFT) and Apple (AAPL) this year have taken different roads yet the journeys of both tell different tales. Looking at a chart comparison that I put together on Yahoo finance, one can observe Microsoft's increasing value while Apple went in the opposite direction.
Yet Microsoft's highly anticipated release of Windows 8 was not considered successful by most analysts and investors. From a visual standpoint Apple would appear to envy Microsoft's growth this year, but the reality of the situation does not play out that way. Windows 8 was such a radical shift from other upgrades and the learning curve was so great, why wouldn't people just switch to an Apple Mac computer?
Even though Microsoft recently slowed down, the announcement that it just entered a $7 billion deal to acquire Nokia's core cell phone business, may send the stock heading north again. Much of its core revenue still comes from the PC platform business but MSFT has also been in transition as it attempts to make a stronger business in the mobile phone market.
Windows 8 failed to resurrect the PC industry and major PC focused companies like Hewlett-Packard (HPQ) continue to struggle with declining "core operations" as PC sales continue to decline. Was Windows 8 a significant contributor to the continued decline in PC sales instead of its savior as many hoped?
When figures came out in the first quarter of this year and sales declined by 13.9% compared to the same time in 2012, it was almost twice the dismal prediction of a 7.7% decline that IDC pointed out in its "Worldwide Quarterly PC Tracker." These terrible figures came in despite new PC models offering the new Windows 8.
Not only did the Microsoft program update not provide a boost for the PC market but it was also blamed for contributing to its continued slow down. The radical change, especially something as significant as the absence of the "start button," did not make PCs an attractive alternative to dedicated tablet consumers. Market response to Windows 8 remains slow and this hampers bringing in new products for retailers to sell.
Even though Apple stock has been in decline, the company's products continue to be the biggest threat to the success of Windows 8. Not only is the Mac a threat to the PC industry, but the iPhone and iPad continued to win customers. I don't even need to mention Google's (GOOG) android system run tablets will also be a threat.
Microsoft has a plan to release a "new and improved" Windows 8 it is dubbing Windows 8.1. The company is making some big changes; it is bringing back a start button, creating a better mail app and making the transition from the old classic Windows to the modern apps structure more appealing. For businesses, Outlook mail and calendar app will also be on the Windows RT version.
Windows 8 did not fare as well as expected, and the company says it has addressed and fixed the major problems with the software. Now here's the question: will it attract those who want a new PC more than Windows 8 did? Windows 8 was such a learning experience it turned off many consumers who didn't want to be bothered.
With a scheduled release date of October 18 for commercial customers and consumers alike, the company has 60 days before the holiday kickoff begins to market its launch as much as possible.
Can this revive the ongoing slump PC sales has felt through the years? While the personal PC computer market continues to be sluggish, the commercial PC business is picking up. Intel (INTL) is expecting the second half of the year and into the beginning of 2014 to see better PC sales based upon businesses buying for their companies. If Windows 8.1 proves to be less of a burden for consumers and businesses alike, we could experience a temporary revival in the consumer PC market.
There is a "mythical" expectation that consumers will flock to the market to purchase new PCs to replace the older models than average about four years because they are too slow with today's technology. But this wave of personal PC revival has not taken place and I believe Microsoft has expectations that Windows 8.1 might start that wave.