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Why Tim Cook Was Right to Bash Microsoft Corporation at Apple Inc's WWDC


Apple  (NASDAQ: AAPL  )  released a smorgasbord of new information Monday during WWDC 2014, the company's annual developer conference. CEO Tim Cook made passing criticisms of competitors and hit the nail on the head with his comments on Microsoft  (NASDAQ: MSFT  ) .  

WWDC focused on a wide range of Apple products, but the Microsoft slam came shortly into Cook's keynote address, which led to the Yosemite OS announcement due this fall. Yosemite was designed to appeal to a broader audience in an effort to snatch away market share from Windows PCs. And Cook made sure to mention Microsoft's recent OS problems. 

So what did Tim Cook say -- and why was he right? 

Microsoft's Windows 8 failure 
Cook brought up the adoption rate (or lack thereof) for Microsoft's Windows 8 operating system. While discussing the fact that Apple's newer OS Mavericks was installed by over half of Mac users, Cook displayed a chart showing Windows 8 with a 14% adoption. 

While Windows 8 hasn't received a warm welcome, Microsoft still owns the largest share of the desktop market. According to Net Applications, Microsoft's Windows 7 held over half of the market in May compared to nearly 6.3% for Windows 8, and 6.35% for the freshly launched Windows 8.1 update. 

The only Apple OS to make the Net Application list was Mavericks, which held over 4% of the market. So that suggests that Mac users did largely upgrade when the choice became available. 

Source: Net Applications. 

So Cook was right that Mac users took to Mavericks much faster than PC users took to Windows 8. But there are a couple of key differences.

Apple offered the Mavericks update for free to compatible systems, while Windows 8 upgrades started at about $100. And some users of older Mac systems were forced to upgrade when support was discontinued for the four-year-old Snow Leopard, which occurred around the same time as an important security update. Microsoft also retired an OS from support this year -- the 12-year-old Windows XP. 

Why Tim Cook was right 
Windows 8 has a larger desktop market share than Mavericks. But a new update that featured a Start button, but not a widely desired Start menu, has already surpassed Windows 8. ZDNet reported Monday that the promised Start menu might not make it to PCs until next year. And Microsoft is thought to have cut Windows 8.1 licensing prices by 70% for low-end manufacturers simply to keep some degree of momentum behind the operating system.

Mavericks has the smaller market share, but unlike Windows 8 doesn't have enough egg on its face to make an omelet. And Yosemite OS X could attract more users to Macs due to the furthered iPhone integration. Windows 8 boasted a similar cross-platform nature, but sales of iPhones trounce sales of Windows Phones. According to Gartner, iOS devices held nearly 16% of the worldwide smartphone market in 2013. Microsoft's share came in a bit over 3%.

Foolish final thoughts 
Apple still lags behind Microsoft in desktop market share, but Microsoft has entered an odd era where innovation has been replaced with late-to-the-game reactions. Microsoft needs more improvement updates or Yosemite could take a bite out of its market. 

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Read/Post Comments (8) | Recommend This Article (3)

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 June 04, 2014, at 12:17 PM, butthead2u wrote:

    It's going to be great to see Microsoft crush Apple a second time! They did it the 90's and it's just starting to take shape now for the 20's. Investing is about long-term (although it did take Apple a long time to have some decent growth).

  • Report this Comment On June 04, 2014, at 2:23 PM, chilero wrote:

    As all companies do Apple was simply playing with select numbers to make themselves look good.

    Windows 8, considered a failure, still has a larger installed base than all Mac OSX versions combined. Windows Phone, also considered a failure by some, has the same mobile market share as Mac has desktop share.

    But it is the mobile phone battle that is currently more important. That is where MSFT has done okay, but needs to do much better. With all of the new OEMs for Windows Phone bringing out phones all over the world this year I expect MSFT do outperform the current IDC predictions for mobile market share.

  • Report this Comment On June 04, 2014, at 2:44 PM, Hoptopia wrote:

    Oh yeah MS the innovation company.. just keep putting lipstick on the windows pig. I will congratulate them on pigeon holing businesses into the endless upgrade cycle that is their cash cow.

  • Report this Comment On June 04, 2014, at 3:28 PM, st4s wrote:

    So much ignorance, so little time...

    To the writer - Yosemite packed a lot of innovations already existing in W8. And guess what?? The biggest one was the search thingy... Based on BING!

    To the knowledgeable commentators - over 80% on Macbooks run Windows.

    MSFT has the highest risk, open ended research and innovation team. Go have a look at MSR work in astrology, biology, food and energy.

    And guess what? It is about the ecosystem of innovation. MSFT has nonissues doing lots of business with Apple.... Check your facts and history.

    There is no one winner in todays market....if there was, innovation would stop and consumers would suffer.

    P.S. : I love haters... Have a great evening!

  • Report this Comment On June 05, 2014, at 1:06 PM, butthead2u wrote:

    Hoptopia, real-time language translation, not innovative enough for you, eh? How about Xbox, Kinect, icons on you phone that provide information and pictures rather than just kid like pictures?

  • Report this Comment On June 05, 2014, at 1:50 PM, IloveLinux wrote:

    Its a mixed bag for sure. Macs cost more then comparable Windows computers but Mavericks and the new OS X 10.10 are FREE. I tried the developer preview and its nice. Apple has great customer service and the fact that OS X rarely gets malware or the problems associated with Windows or Android are a huge plus.

    Windows 8 is a mess. Useable but a mess but with tweaks from third party software can work okay. The fact that the newest OS X updates are free is a big thing. I run OS X 10.10 on a seven year old Macbook Pro but too be fair I also run Windows 8 on a seven year old Lenovo Thinkpad.

    MSFT has itself to blame for people buying Macbooks after the W8 debacle. Personally I like Linux over both of these.

  • Report this Comment On June 05, 2014, at 6:36 PM, dolfan1 wrote:

    Apple has 4.15% of the market and Cook has the balls to slam Microsoft. Adoption rate means very little in this scenario. Actually it has a somewhat negative for Apple, meaning at least half of Mac users are tired of, or not happy with the older OSX versions, while Windows users are happy with older versions. Also, aren't OSX upgrades free, so why not upgrade as long as your system can handle it. New Windows OSs can be expensive, so many don't want to, or can't afford to spend the money. Also, many older PCs aren't capable of upgrading, and many users are content with their new toys (Smartphones and tablets).

  • Report this Comment On June 06, 2014, at 7:54 AM, butthead2u wrote:

    For Microsoft, it's damned if you do, damned if you don't! Anyone who thought the huge transition from PC to mobile computing was going to be a slam dunk on the first iteration is quite frankly a fool.

    Just about every other iteration of Windows has been ruled a success. I be surprised of Windows 9 doesn't have phenomenal success.

    It's funny how everyone thinks it's going to be a tablet or a laptop, it'll likely be a tablet and a laptop and an Xbox in every home when it's all said and does. They've been saying it since the beginning of the transition, Windows everywhere!

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Brandy Betz

Brandy Betz has written for The Motley Fool since 2011 and primarily covers health care, ETFs, and dividend stocks. You can follow her on Twitter @BrandyBetz.

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