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.

Competitors
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.

Conclusion
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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers