Watch stocks you care about
The single, easiest way to keep track of all the stocks that matter...
Your own personalized stock watchlist!
It's a 100% FREE Motley Fool service...
If you've been watching the NFL at all these last two weeks, you've no doubt seen Microsoft's (NASDAQ: MSFT ) new Surface commercial. The ad pits the Windows-maker's own Surface RT tablet against Apple's (NASDAQ: AAPL ) full-size iPad.
Microsoft's ad agency did a good job explaining why the Surface RT is superior to the iPad. Unfortunately, it leaves out the most important factor; the only factor that even matters.
The iPad's flaws
As Microsoft's ad is quick to point out, the iPad has its flaws -- numerous ones, in fact. The iPad, for example, lacks a USB port, and more generally, any sort of expandable storage. It's expensive compared to its rivals, and it's pretty basic -- it doesn't really have additional features like the Surface RT's kickstand and keyboard cover.
But fundamentally, that just doesn't matter.
Although Apple has been passed by in terms of total tablet market share, the "King of Cupertino" remains the single biggest tablet vendor. Despite its numerous flaws, consumers continue to flock to Apple's flagship tablet. (Not to mention Apple's iPad Mini, which -- as I've said before -- is even more outclassed compared to its rivals, yet estimates suggest is actually more popular than the full-size iPad.)
And therein lies the problem for Microsoft: When it comes to tablets, consumers want apps, and when it comes to apps, Apple's iPad is the undisputed king. Not only can the iPad draw from the large library of apps designed for the iPhone, but there are thousands of apps made specifically for Apple's tablet.
According to Flurry, 80% of the time consumers are using tablets, they're using an app.
The Windows app store continues to lack apps
That's a problem for Windows tablets like the Surface RT, because the Windows mobile app store is decisively lackluster. Numerous key apps like HBO Go, Vine, LinedIn and Amazon Instant video are missing, in addition to many popular games such as Candy Crush, important because of how much time people spend playing games on their tablets (according to Business Insider, over two-thirds of the time, tablets are being used to play games).
As long as such a large app disparity exists, Microsoft is going to have a difficult time convincing users to buy its tablet over Apple's competing product. Even $150 more expensive, the iPad's app library makes it more useful than the Surface RT.
Hewlett-Packard gives up on Windows RT
Perhaps that's why other tablet makers, like Hewlett-Packard (NYSE: HPQ ) , have so far avoided releasing a Windows RT device. As one of the world's largest makers of traditional PCs, the two tech giants have had a close working relationship for years.
But that relationship is limited when it comes to tablets. HP offers Windows-based tablets, but none of them run Windows RT. Instead, they come with full Windows 8 -- that gives them the ability to run the enormous library of programs written for traditional PCs, but they're expensive ($600-800) and still limited when it comes to touch-enabled mobile apps. Instead, HP is warming up to Google's mobile operating system when it comes to tablets. Its $170 Slate 7 remains one of the cheapest devices in its class, while its recently released SlateBook x2 is a capable, full-size Android tablet.
Priced at $480, the 10.2-inch SlateBook x2 is a worthy competitor to Apple's iPad. Like the Surface RT, it was even designed with a custom keyboard. Yet, unlike the Surface RT, it has access to a multitude of apps -- all those available on the Google Play Android app store.
CEO Meg Whitman has emphasized a new HP, one built around "multiple operating systems." It can't be good for Microsoft's mobile strategy when HP opts to go with Android for its would-be iPad killer.
If the dogs won't eat it...
No matter how much Microsoft spends on advertising, it isn't going to change one simple truth: Windows 8 lacks mobile apps.
Given how important apps are to tablet users, Windows RT's non-existent app ecosystem makes it a non-starter when it comes to consumers. Microsoft may not have realized this, but its hardware partners sure have: HP's embrace of Android suggests that Microsoft has its hands full when it comes to turning around its mobile strategy.
Understand Tech From An Investing Standpoint
The tech world has been thrown into chaos as the biggest titans invade one another's turf. At stake is the future of a trillion-dollar revolution: mobile. To find out which of these giants is set to dominate the next decade, we've created a free report called "Who Will Win the War Between the 5 Biggest Tech Stocks?" Inside, you'll find out which companies are set to dominate, and we'll give in-the-know investors an edge. To grab a copy of this report, simply click here -- it's free!