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Will Apple Save Microsoft's Tablets?

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It's safe to say Microsoft (NASDAQ: MSFT  ) and Apple (NASDAQ: AAPL  ) aren't the best of friends. The animosity between the two IT giants goes back decades, and with Microsoft's transition to a mobile device provider in full swing, that's not going to change. But as strange as it sounds, the success of Apple's new tablet, the lighter-than-helium iPad Air, and an interesting trend in PC sales could turn out to be saving graces for Microsoft's tablet ambitions.

After taking a $900 million hit in its fiscal Q4 because of abysmal Surface RT tablet sales, Microsoft could certainly use all the help it can get. But from PCs and Apple?

The scoop on PCs
To no one's surprise, the overall PC market will continue to decline this year, dropping 10.1%, according to IDC. The biggest drop in PC sales is among consumers -- nearly 15% in 2013 -- as individuals opt for mobile devices rather than those old-fashioned desktops. But digging a bit deeper, IDC's data opens up a few intriguing doors that Microsoft, with the assistance of Apple, can take advantage of.

IDC's data makes a distinction between PC types in its sales projections through 2017: desktop PCs and portable PCs. As IDC puts it, "The emergence of 2-in-1 devices designed to function in both clamshell and slate configurations -- many of which will run Windows -- along with Windows-based tablets themselves, is expected to provide some new volume for the Windows platform as well as the PC vendors and other parts of the traditional PC ecosystem in coming years."

Just as the line between smartphones and feature phones gets fuzzier every day, the distinction between portable PCs and tablets with detachable keyboards, loads of memory, and all the software you'd expect from a PC is also becoming hazy. Case in point: By 2017 portable PC sales are expected to grow worldwide by 2.1%, including a nearly 5% jump in emerging markets. That, combined with the likely change in consumers' appetite for screen size, fits right into Microsoft's wheelhouse.

Thanks, Apple
As the recently completed Black Friday madness confirmed, Apple's iPad Air is a rousing success. Why should Microsoft care about Apple's Air? Because the ultra-thin, ultra-light iPad Air, with its nearly 10-inch screen, combined with the advent of phablets, may change consumers' buying habits for tablets -- and Microsoft's Windows OS will be the beneficiary of that change.

The trend in tablets the past couple of years has been toward smaller screens, like Apple's iPad Mini with its 7.9-inch display. But, according to IDC (and common sense), that's likely to change as more phablets -- including the soon-to-be-Microsoft Lumia 1520 and Lumia 1320 -- become available. Why buy a phablet with a 6-inch screen and a mini-tablet with a 7- or 8-inch screen? There is no reason, and that will drive consumers to look toward larger-display tablets, as they are with the iPad Air. A trend toward larger screen sizes is ideal for Microsoft's Windows OS, which is best suited for displays that have some real estate.

Final Foolish thoughts
The success of Apple's iPad Air, with its nearly 10-inch screen, coupled with larger smartphones, will help push Microsoft's tablet OS market share from this year's paltry 3.4% to more than 10% by 2017. Apple? During that same time period, IDC suggests Apple's tablet OS share will drop from 2013's 35% to 30.6%.

This won't be easy, Microsoft fans, but a heartfelt "thanks" to Apple will be in order before long.

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Read/Post Comments (8) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 07, 2013, at 9:24 PM, prginww wrote:

    So the PC was Dead? Ha, ha but now the Fools are saying the PC Lives inside 8-10" tablets but not 4-6" smart phones? We'll my 4" Lumia 900 has had a Windows 7.8 PC Inside it since April 2012. Now my Asus T100 Bay Trail 10" 64Gb 2-in-1 notebook tablet runs Windows 8.1 w/ Office 2013. Microsoft doesn't need to thank Apple or it's iSheepie. Microsoft needs to focus on showing everybody what a pimp Google is for advertisers invading mobile devices using Android virus. Appel can then thank Microsoft for saving some of their customers from switching to crap like Chrome books.

  • Report this Comment On December 07, 2013, at 10:00 PM, prginww wrote:

    I don't know why I keep coming back here.

    Apple and Microsoft have a joint partnership agreement going back to Jobs' return and Microsoft's legendary investment. This settled a lawsuit that went all the way to the supreme court. They are secret partners.

  • Report this Comment On December 07, 2013, at 11:16 PM, prginww wrote:

    What a silly notion. It is iOS that will be the beneficiary of people buying iPads, not Windows OS. Windows 8 is a failure. The numbers are pretty clear. More Apple customers does not change that.

    Wishful thinking without logic. The author could be CEO of Microsoft.

  • Report this Comment On December 08, 2013, at 7:19 AM, prginww wrote:

    This article doesn't make much sense.

    Windows 8 and its underlying strategy of unification will succeed - that's pretty much a given at this point, as anyone actually paying attention to current trends and reviews realizes. We've seen this pattern with just about every radical OS change or introduction.

    Apple will either follow suit in some fashion (they seem to be laying the groundwork already), or stick to their earlier claims and face inevitable decline as more and more people get over their blind mistrust of Win8 and Microsoft in general.

    This all assumes MS can avoid shooting itself in the foot yet again, of course. We'll have to see. But you'd be kidding yourself if you think they have anyone to thank but themselves for the good, just like they have no one but themselves to blame for being so late to the game.

  • Report this Comment On December 08, 2013, at 3:48 PM, prginww wrote:


  • Report this Comment On December 08, 2013, at 3:50 PM, prginww wrote:

    I HATE everything Microsoft and I'm sure there are hundreds of millions just like me. Crappy OS that was shoved down our throats for years. Now the chickens have come home to roost. Let's hope Microsoft goes the way of the Dodo bird. It wouldn't be missed.

  • Report this Comment On December 08, 2013, at 4:10 PM, prginww wrote:

    Microsoft fans act towards the Chromebook as if it was Joffrey Baratheon. Chromebook to Microsoft -- Well Microsoft, which will it be? Your fingers or your tongue?

  • Report this Comment On December 08, 2013, at 4:24 PM, prginww wrote:

    Personally I tend to recommend 'hating' products for specific reasons, rather than harboring broad prejudices against a given company. There are exceptions, of course, but tech companies generally don't fall into that category.

    I would personally miss Microsoft. I love being able to build a computer that puts any Mac to shame for less than their cheapest offering. I enjoy the ease of use and compatibility that comes with modern windows products - something Apple helped bring to the mainstream, but has thus far failed to perfect.

    There will always be those taken in by advertising from any source, particularly a source like Apple that keeps itself above many hardware competitors by refusing to deal in low-end products. They won't tell you that their market share in personal computing is so miniscule that they aren't seen as a valuable enough target for people to write malware for them, they'll just say that they don't get viruses. Never mind that fairly recently hundreds of thousands of Macs were compromised by a single virus, and pay no attention to the contest held a few years back in which a group chose to crack a MacBook Pro (in under two minutes) instead of a Windows Vista or Linux laptop because it was the easiest of the three.

    They also won't tell you that OSX is painfully slow to start up and shut down - they'll just say that it never gets slower over time, a 'fact' that doesn't quite agree with what I've been told by my customers, and doesn't actually set it apart from PCs since free tools exist that can refresh a hard drive with a few clicks.

    They'll promote themselves as a quality solution to those cheap, unreliable windows PCs that most people are used to, but they'll quietly ignore the equally-priced PCs that outperform them and often include additional features. You get what you pay for, they'll say, without acknowledging that it's true of PCs too.

    I would be pleasantly surprised to see Apple or Google offer a competitive alternative, but thus far they haven't done so, so my present hopes lie in Microsoft continuing the difficult transition they've recently begun.

    Those who avoid blinding themselves with brand loyalty stand to gain quite a bit, regardless of which way the winds blow.

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