Microsoft Can Compete With Tech Giants in 2014

Microsoft has made changes to drive growth in the New Year. But, will Google and Apple allow it to boost its income?

Jan 9, 2014 at 11:00PM

Microsoft's (NASDAQ:MSFT) investors enjoyed gains of more than 30% in the past year. Despite this, some analysts doubt that the company can get to where it needs to be. However, Microsoft has made changes to drive growth in the New Year. For instance, Microsoft is adding new features to its Windows Phone. Also, the company will soon finalize the purchase of Nokia's devices and services division. Finally, the tech giant has also made some changes to its tablets.

The Nokia purchase
Microsoft is closing in on the purchase of Nokia's devices and services division for $7.2 billion. The deal has been approved by the Department of Justice, the Federal Trade Commission, European Commission, and Nokia shareholders. The deal gives Microsoft a greater business opportunity. Microsoft got less than $10 in revenue from each Nokia Windows phone sold. It stands to make $40 or so in profit margins with the deal. The purchase is also another step toward competing directly with Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOGL) in the mobile hardware and software space.

The prospect of Windows Phone
Microsoft's Windows Phone still lags behind Apple's iOS and Google's Android. However, Microsoft is working on a Windows Phone 8.1 update. The company intends to add a notification center and set volume levels for different apps. The new features should make the devices more appealing to consumers. In December, devices running the Windows 8 and 8.1 crossed over 10% of the market share for the first time.

An area to watch
Microsoft has helped push its smartphone platform by boosting the number of apps in its Windows Phone store. The platform was seeing uploads of approximately 500 new apps per day and has had more than 3 billion downloads to date. Additionally, the store now boasts more than 200,000 apps. Though significantly fewer than the one million apps offered by both Apple and Google, Microsoft is making progress.

Microsoft's tablet exploits
Microsoft made some tweaks to the Surface 2 and Surface Pro 2 last September. Consequently, the company's tablet exploits are also a big area to watch in the New Year. Although the tablets did not break sales records, the tweaks should make them more attractive to consumers. A new survey conducted by Bernstein Research showed that 81% of CIOs plan to purchase Windows tablets, up dramatically from 56% six months ago.

At the end of October, Apple occupied the No. 1 spot for U.S. smartphone subscriber market share for OEMs. While Microsoft is growing in the app sector, its number of apps pales in a comparison to Apple's 950,000 apps. However, it has been reported that iOS 7 will focus more on in-car integration in the future. Apple is improving in that section of iOS to deliver technology to more cars. Apple customers spent over $10 billion in the company's App Store in 2013, demonstrating the continued appeal of native mobile apps.

Google's Android has 52.5% share of the U.S. smartphone operating system market. Google will partner with luxury auto manufacturer Audi to unveil an Android-based vehicle entertainment and information platform. The partnership will allow drivers and their passengers to access services similar to those available on Android-powered smartphones. In 2014, sales of phones and tablets running Google's Android operating system are projected to reach 1 billion users for the first time.

Microsoft CEO, Steve Ballmer, announced in August that he will be stepping down. The decision will provide opportunities for new perspectives in 2014. Nokia's devices and services division will boost Microsoft's growth. New Windows Phone features will enable the product to compete with iOS and Android. The company's tablets will boost sales in the New Year. Microsoft deserves a closer look. Foolish investors should however do their own research before making any investment decisions.

Profiting from the smartphone revolution
Want to get in on the smartphone phenomenon? Truth be told, one company sits at the crossroads of smartphone technology as we know it. It's not your typical household name, either. In fact, you've probably never even heard of it! But it stands to reap massive profits NO MATTER WHO ultimately wins the smartphone war. To find out what it is, click here to access the "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further..."

Mark Girland has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information