Apple Keynote Microsoft


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. 

Net Applications May

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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Brandy Betz has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple 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.