A Great Stock to Stick on To!
Cecil is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
From an investor’s point of view, it’s pretty obvious that the market isn’t impressed by anything that has to do with PCs! And that’s exactly were Microsoft (NASDAQ: MSFT) is at right now. The poor performance of all major PC companies including Hewlett-Packard and Dell in terms of revenue adds a lot of concern to the average investor. And the revenue structure of Intel isn’t helping Microsoft’s cause either.
I’ve said this before and I’m saying it again, Microsoft is a strong company that is poised to take advantage of the smart phone/ tablet market as well as a rebound in the PC segment. Analysts say that by 2014 the tablet market would have over taken the PC market; if this is the case, I feel that Microsoft will still have the last laugh. Why? Microsoft’s strategy is quite brilliant, rather than creating a whole new approach for a tablet platform, Microsoft chose to modify its present OS so as to suit a tablet environment. This ultimately will create an operating system that suites the conventional PC and touch interface devices; this is Windows 8!
How does this become a brilliant strategy? 83% of all computer users use Windows; from a very logical point of view if there is a shift towards tablets, Microsoft will have an easy time convincing its existing customers to move to a tablet that will enable them to use all their existing programs right out of the box (a feature no other operating system can do). With such an attraction on the table, Microsoft can shun tablet sale of Apple and Android based tablets.
Windows 8 might end up being the perfect transition for Microsoft from the conventional (and ultimately obsolete) PC market to the tablet market.
Windows phone 8
The mobile phone industry is another place that seems to have a bright future for Microsoft. The Windows Phone 8 will be released on Nokia‘s (NYSE: NOK) Lumia series. Though initially this looked like a really bad move, with the launch of the Apple’s (NASDAQ: AAPL) iPhone 5, I beg to differ purely because of the fact that though Apple has a higher quality, it necessarily isn’t the better phone when compared to Lumia. Here are a couple of comparisons on that front.
First off, Lumia runs on a dual core Qualcomm Snapdragon S4 processor. Now the iPhone 5 runs on ARM Holdings Cortex A15; this processor is very similar to the Snapdragon S4.
While the iPhone boasts of its “retina display” which has a resolution of 1136x640, the Lumia has a resolution of 1280x768. Now here the Lumia stands out. Lumia 920 has a bigger screen size when comparing the two. iPhone has a 4” screen while Lumia has a 4.5” screen. Even when comparing the pixel densities, Lumia 920 has 332 pixels per inch as compared to the 326 for the iPhone 5.
I could go on with this comparison, but I feel all of the above prove my point. So now all Nokia Lumia 920 requires is Windows Phone 8 to perform well in order to help Nokia regain some of its lost market shares.
I feel Windows Phone 8 will do well in our market. The product seems to have covered every aspect that a consumer looks for. A lot of people are skeptical about Windows when it comes to apps, even this seems to be an issue that has been covered by the company; Microsoft has announced that all apps from Android and Apple can be ported to the Windows Phone 8 easily.
While all of the above points show us what Microsoft as a company has in store for the consumers, I can also list out a couple of reasons why Microsoft as a stock is formidable!
The balance sheet of this company is immense. Microsoft has about $62 billion in cash and only $12.78 billion dollars in debt. I don’t think I know another company that is this secure. When your debts are this low, you can afford to try new things and Microsoft has been know for trying out new things (does Xbox ring a bell?).
As an investment, Microsoft’s dividends have been quiet generous; it has almost doubled in the past 5 years. In terms of buy backs, over the past five years it has decreased to a great extend.
On a concluding note, if you haven’t bought Microsoft till now wait for another dip and if you have Microsoft hold on to it!
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ceciljohn2002 has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple and Microsoft. Motley Fool newsletter services recommend Apple. 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.If you have questions about this post or the Fool’s blog network, click here for information.
